26 April 2009
We enjoy 180 days credit from Overseas supplier in terms of Import L. C.. We are required to pay interest in foreign currency at the time of retirement based on interest rate at BBA / LIBOR. On the retirement of Import Bills, our Banker also remits interest as per Bill of Exchange drawn.
Please advise whether TDS is attracted on interest remittance and the rate thereof.
Please also advise Returns to be filed in this respect.
Please appraise me with the latest changes in the TDS Provisions in this respect which are being made applicable wef 1st July, 2009.
26 April 2009
TDS is applicable. You have to deduct tds as per section 195 or you have to deduct tds as per Dobule taxation avoidance agreement with that country.
If you pay interest without deducting tds then it will attract penalty and also entire expenditure will be disallowed.
CAclubindia
