sudhakar reddy (Chartered Accountant) (50 Points)
23 October 2009An XYZ is a NBFC company, which has taken a loan from Society, The society has taken loan from ABC(NBFC company) and the same loan amount was given to XYZ for the same interest rate. While paying XYZ interest to Society TDS are not deducting. Whether TDS to be deductable or not? If TDS deducted, is there any need to deduct TDS by Society while paying interest to ABC company.
Sudhakar
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 23 October 2009
Definitely TDS has to be deducted...in the two cases.....................
Persons liable to deduct tax at source: Any person except individual or Hindu Undivided Family (HUF). But, individual and HUF are liable to deduct if their turnover or gross receipts from business or profession exceeds the limits specified in section 44AB. In other words, if the individual or HUF is liable to get accounts audited under section 44AB, they would be covered.
if the interest amount is Rs.5,000/- or less in the financial year, there is no need to deduct income tax at source.
Sunil
(Trader)
(2611 Points)
Replied 23 October 2009
The Section 194 A shall not apply for:-
(iii) to such income credited or paid to
(a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or
(b) any financial corporation established by or under a Central, State or Provincial Act, or
(c) the Life Insurance Corporation of
(d) the Unit Trust of
(e) any company or co-operative society carrying on the business of insurance, or
(f) such other institution, association or body 29[or class of institutions, associations or bodies] which the Central Government may, for reasons to be recorded in writing, notify30 in this behalf in the Official Gazette;
As ABC and Co. is a non banking financial company, even though the Banking Regulations Act applies on them, you still have to do TDS on their payment. However, they could be having a certificate from their assessing officer to allow TDS at nil or lower rates. If they do have this, then you can obtain a copy from them and deduct nil or lower rate as applicable. therefore ask them to submit copy of such certificate or else you would deduct TDS and pay them.
Avinash Shankar Bawane
(aa)
(26 Points)
Replied 24 October 2009
i want to know whether NBFC isliadle for tax deuction on payementof interest above 5000 or 10000.
Sunil
(Trader)
(2611 Points)
Replied 24 October 2009
On 5000. NBFC is Non Banking Financial Company. The increased exemption for deduction is only for Banking Companies. Even though Banking regulations act apply on NBFCs and they have to take license from RBI, their category shouts loud and clear that they are Non Banking.
Avinash Shankar Bawane
(aa)
(26 Points)
Replied 24 October 2009
| Originally posted by :Avinash Shankar Bawane | ||
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Avinash Shankar Bawane
(aa)
(26 Points)
Replied 24 October 2009
| Originally posted by :Avinash Shankar Bawane | ||
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Kumar Agarwala
(CA Practice )
(75 Points)
Replied 24 October 2009
TDS TO DEDUCTED IF AMOUNT > RS 5000
CA Simarpreet Singh Gulati
(Chartered Accountant)
(530 Points)
Replied 02 March 2010
If an individual takes a license to finance vehicles in his individual name, can the income earned on the vehicle finance be shown in the return of income of HUF if the funds of HUF are employed for finance?
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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