Interest on vehicle loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2012 hello can any one give me answer

if repayment of vehicle loan (i.e. principle and interest )then tds is applicable or not for Interest on vehicle loan. the income tax officer disallowed for this interest it is correct or not .

please inform me whether any case laws .
thank u
Prasas

Sanjana

Sanjana (Expert)
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02 January 2012 If the Vehicle loan is taken from a Bank or Financial Institution then No TDS is required to be deducted. But if the loan is taken from any other party and if you fall under the definition of Persons responsible for deducting TDS i.e. if you are a Company, Firm or; individual or HUF falling under the purview of the provisions of Tax Audit then TDS will have to be deducted on Interest paid under Section 194A.

If you have not deducted TDS on Interest, then the AO is correct in disallowing the Interest expense for that year.

However you can deduct and pay TDS now and claim deduction in the current year. You can recover this amount of TDS from the party from which you had taken loan.