Urgent reply!!!!!

TDS 1549 views 13 replies

Hi All,

 

I wanted to know whether TDS is to be deducted on Interest paid on delayed payments? Ex: The creditor charges interest for delayed payment @ 18% pa.

If the interest exceeds Rs. 10,000/- is it necessary to deduct TDS u/s 194A?

 

Please reply soon.

Replies (13)

Yah TDS should be deducted.

yes the creditor in the above is case is liable to deduct tds...

Interest paid on delayed payments is the compensation for the loss of creditor in the ordinary course of the business. It is the part of the business receipt and deriving an income by way of interest. So, As per my view, TDS u/s 194A should be deducted.

Yes it needs to be deducted, if you are not an individual or HUF, or if you are an individual, then you have the turnover specified in 44AB, and the limit is Rs. 5,000/- in this case. if the interest amount exceeds Rs. 5,000/-, then you are liable to deduct tax. Hope you are not a co-operative society and the creditor is also not a co-operative society. If both the parties are, then section shall not apply.

194A. 16(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income 18[by way of interest on securities], shall, at the time of credit of such income to the account of the payee19 or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :

20[Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section.]

yes tds is to be deducted 

Tds needs 2 b deducted..

A payment which has direct link and immediate nexus with trading liability will not fall within category of interest, while paying interest on delayed payment of purchase bills. No TDS obligation arises.
.
Sri Venkatesh Paper Agencies (Hyd.) (P) Ltd. Vs DCIT 2012

Yes TDS needs to be deducted...

Fully agreed with above. TDS is to be deducted...................

Yes, TDS needs to be deducted..

Yes TDS will be deducted and the provision of TDS as they are applicable in normal case

 

Yes, TDS needs to be deducted if the amount exceeds Rs. 5000.

Yes TDS is to be deducted...!!!! agreed with all above!!!!!

thanks!!!


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