TDS on Bill Discounting

This query is : Resolved 

13 January 2008 i am discounting my bill of Rs. 50,00,000/- thru a private party mr.A and he is deducting Rs.50,000/- as a bill discounting and send me a Cheque of Rs. 49,50,000/- should i require to deduct tax u/s. 194A on rs. 50,000/- whether it covers under definition of Interest ?
so, my query is wheter i should deduct tax on charged debited to my profit and loss account under the head of 'bill discount'. in recent judgement of of Kanha Vanaspati Ltd..v.Additional Commissioner of Income-tax, Range-50, New Delhi, kindly clarify considering this judgement. the main problem is how can i deduct tax as i am not directly paying anything in form of bill discounting as the financer cut the same charges and then after giving me a remaining payment

27 February 2008 The bill discounting has done been done thru banks.
The charges deducted is nothing but the commission. As such the TDS should be deducted.

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16 January 2011 No, charges so deducted is not the commission but it can be treated as interest.




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