I want know whether TDS we have deduct on Interest on Chit Fund or not. If yes then what percentage we have deduct and any circular for that pls reply.
23 November 2009
The amount disbursed by a chit fund company to the members from their contribution cannot be treated as `interest’; as the payments made/disbursed to the subscribers/ members are not `interest’, therefore, the question of deducting any tax at source therefrom would not arise; in the case of a chit fund, there is no borrowing of moneys nor any debt is incurred and as such the provisions of section 2(28A) are not attracted.
CASE LAW DETAILS
Decided by: HIGH COURT OF DELHI, In The case of: CIT v. Sahib Chits (Delhi)(P.) Ltd., Appeal No.: ITA No. 44 of 2008, Decided on: July 24, 2009
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