06 May 2009
The definition of Interest has been provided in section 2(28A) of the Income tax Act as following .
"interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised;
According to this definition the interest includes means any charge for credit facility.
As per section 194A(3)(iii) of Income tax act the TDS is not required to be deducted from the payment or credit made to a banking company engaged in the banking business. Thus no TDS is required to be deducted from it while making payment to a banking company.
Howerver the if the payment is being made to a company which is not a banking company TDS is required to be deducted.
06 May 2009
No,In case of financial charges but if this is in shape of fee,Then yes.being financial charges are in nature of exp.not contractual payment.I opine no tDS.
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