I am an Accountant based in Salem. One of my clients taken Mortgage Loan from ICICI HFL and paid interest of around 8 Lacs for FY 2012-13. What is the procedure for TDS if applicable? Please guide. with regards J Natarajan
18 January 2014
Interest on loan is covered to TDS u/s 194A of the Income tax Act. However, as per Sec.194A(3)(iii), interest paid to any banking company to which Banking Regulation Act, 1949 applies is not subject to tax deduction. Thus, any interest on car loan obtained from banks are not subject to TDS. But it must be remembered that Interest paid to non banking finance companies, the TDS is applicable u/s 194 A.
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