08 January 2013
I took a personal loan from a bank and gave as loan to my wife's pvt ltd company. The terms will exactly be the same as that between the bank and me. As it's not an income for me (principal + interest comes to me and goes to bank). Could I have an agreement with my wife's pvt ltd company that no tax be deducted at source.
09 January 2013
The TDS provision doesnot envisage such an arrangement between the parties and if so every one will enterinto an agreement for non-deduction of TDS and be done with it. Though for the transaction in discussion you generate no income as the interest revable from your spouse will be the same of interest paid to the bank, but you might be having income from other transations which will qualify as an income. Therefore, you cannot avoid the TDS from your wife company on the interest amounts paid to you. However, you may apply to the Assessing Officer in Form 13 seeking waiver of income tax u/s 197 of the income tax act for the sait transaction.
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