Interest on Capital to Partners

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 Whether TDS is to be dedcuted on interest credited or paid on capital of Partner(Partner being a Company )by the Partnership Firm.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 October 2010 Not required as per section 194A(3)(iv)

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CA Punit

CA Punit (Expert)
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28 October 2010 right.. TDS section 194A excludes payment of interest to partners by firm

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taxindiaconnect

taxindiaconnect (Expert)
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28 October 2010 Interest to a partners by a firm is treated as business income, for this logic the TDS is not made applicable u/s 194A on this income of a partner.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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28 October 2010 Taxindiaconnect going by your logic then when payment is made to NBFCs they are also showing interest income received by them as business income.

So should TDS not be deducted while making payment to them also going by your above logic.

Kindly revert on the same.