Tds - interest on loans

This query is : Resolved

Shakthi (Querist)
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14 March 2012 Respected Sir,

If A an individual borrows a loan of Rs 25 lakhs from another individual B, and pays a monthly interest of Rs 50,000 to B, then should A deduct TDS ?

Whether TDS would be applicable on such interest payments?

CS, Deepak Pratap Singh

CS, Deepak Pratap Singh (Expert)
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14 March 2012 No if you accounts are liable to be audited then you have to deduct TDS and accordingly pay the same to the government.

Mihir Doshi

Mihir Doshi (Expert)
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14 March 2012 Deepakji,

My opinion differs here, Its not the requirement or precondition that person should deduct TDS if Tax audit is applicable to it.

TDS provisions are different from Tax audit provision. In absence of Tax audit, TDS provision will be applicable or vice a versa.

Here, as the interest is exceeding limit INR 5,000/- then section will be applicable.

Thanks
Mihir Doshi

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Shakthi

Shakthi (Querist)
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14 March 2012 Thank you Doshi Sir and Deepak Ji