Nishit (student) (33 Points)
24 July 2009Backgroung
The company is crediting the account of subscribers for the interest payable on debentures. The principal amount with the interest will be paid after the end of 5 years.
Issue
The company's financial position is not good to pay TDS which it needs to deduct at the time of crediting the account of subscribers.
So is it mandatory to deduct TDS? What options are available to deductor?
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 24 July 2009
Mr. Nish*t TDS is deductible when payment is made or credit of interest in the party accounts made in the books whichever is earlier. Hence if you are accruing interest every year u will necessarily have to deduct TDS on th same even though you are not paying the same now.
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 24 July 2009
Mr.Nish*t If you do not deduct tax at source from the interest accounted for by you, you will have to face consequences of disallowance of the expenditure, interest u/s 201(1A) for not deducting tax at source and paying
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 24 July 2009
the same at a latter date. Penalty proceedings also will be initiated by the assessing officer.
Best Wishes
Sathikonda
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 25 July 2009
Malav Shah
(Company Secretary and AVP Legal)
(171 Points)
Replied 25 July 2009
Mr. Ashraf
You can start the Company with 50:50 shareholding between you and your friend. If your friend agree than he can give loan to the company and the company shall repay it anytime later when the company earns profits. This would not dilute your shareholding in the Company. The company can pay interest on the loan.
The arrangement will depend upon the understanding between you and your friend.
Regards
Malav
sandeepverma
(don't make exuse for study)
(304 Points)
Replied 25 July 2009
tds must be deduct otherwise u r interest exp. disallowed under 201(1a)
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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