28 April 2009
I am deducting interest on over due outstanding from my customer. Please let me know whether TDS/TCS will be applicable for the same. monthly total interest income may be Rs. 30,000.00 from all the customers. Please exlain.....
28 April 2009
You are charging interest on overdue balance of your customers. TDS get attracted u/s 194A, being interest other than interest on securities.
Assuming your customers are other than co-operative society/bank, they need to deduct TDS, if the amount of interest exceeds Rs. 5,000/-. The rate is 10% + applicable surcharge + 3% cess.
28 April 2009
Applicability is TDS arises in the hands of the payer only if the payment made by any payer to you exceeds Rs 5K. Since your debiting to their account, they are liable to make TDS at the time of making credit to your account or payment which ever is earlier. You need not account for TDS at the time of debit, however when the customer credits in your account, the an entry may be paased from interest recoverable to TDS recoverable account.
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