Section 195

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012 i am a partner in a firm.i have taken a loan from a non resident person and credited the same to my capital account.i am not claiming interest as expense in firm's p&L. My question is whether i should deduct TDS u/s 195?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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09 June 2012 Sec. 195 doesn't say anything about claimibility of expenditure as a prerequisite for deduction of TDS.

Unlike other sections which get activated only when the expenses are booked , and there is a limit below which TDS is not required to be deducted , there is no such limit or condition of expenses booking in sec 195.

If any income is being paid to Non-resident then the TDS liability shall be there.

Also under FEMA ,loan in foreign currency can be only received from close relatives.

Anuj
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