Tds on interest payable to mother

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 January 2015 Sir/Madam,

Suppose, a mother has transfered an amount from her own bank account to her son's bank account through cheque, during f.y. 2012-2013 and f.y. 2013-14 by 5 different transactions on various dates. This amount is to be considered as loan from mother to her son.

Mother and son are not any company or firm or other type of registered institutional entity. They both are individual persons.

Now , the son wants to pay the loan amount back with interest in f.y.2014-2015. Then does the son have to deduct tds on interest payable and pay it to the income tax department? And does he have to issue any tds certificate (form 16-A or 16 or any other certificate) to his mother ?

And if no any tds certi. is to be issued, then how can the mother get refund of the tds deducted ? ( in case the mother falls under exemption limit for income tax payable )

And as the son has not paid any interest during f.y.2012-13 and f.y.2013-14, he has not deducted any tds in those years. Now when he is paying interest in f.y. 2014-15, then - any penalty for not deducting tds in past years - is applicable ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 January 2015 If son is an individual and 44AB tax audit is not applicable to him no need to deduct TDS.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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05 January 2015 Why you want to show it as interest paid to Mother on paper, on paper you can treat it as gift given to mother, instead repayments of loan along with the interest.

If you treat it as gift, then there as no provisions of TDS in that transaction, further gift from relatives have no implications under Income Tax Act 1961.

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