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Tds deduction u/s 194A

Arpita (Works as an Employee) (143 Points)

14 March 2012

KINDLY GIVE ME THe SOLN FOR THIS QUERRY:

1) WHAT DOES THE BIFUCATION IN SECTION 194A BY BANK & BY OTHERS ACTUALLY MEAN???

2) WHAT IF THE PERSON IS NOT ELIGIBLE & STILL WE HAV DEDUCTED THE TDS?

3) ILLUSTRATION :

ACYUALY WE HAVE A FIRM WHERE LOAN R TAKEN FRM INDIVIDUALS BY CHEQUE , ND WE HAV DEDUCTED TDS W.E.F 01/04/2011 FOR 3 QTRS UPTO 31/12/2011 CONSIDERING THE THRESHHOLD LIMIT FOR DEDUCTION AS RS.5000/- ??

KINDLY HELP ME FOR THE SAME......THNX IN ADVANCE

Section Of Act Nature of Payment in brief CUT OFF AMOUNT Rate %

194A Interest other than Int on securities (by Bank) 10000 10%

194A Interest other than Int. on securities (By others) 5000 10%

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4 Replies

Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 14 March 2012

Ms.Arpita

At the out set I advise you not to use SMS language in this forum. You are going to be a Chartered Accountnat. Being a professional you are supposed to use regined language.

Coming to your question-

If the loan or deposit is accepted by -

(1) Any Bank

(2) Co-operative Society

and if the deposit is made with Post Office in any scheme framed by the Central Government which is notified

and the interest on the loan or deposit is rupees ten thousand or less than the said amount no Tax is to be deducted at source.

If the interest on any loan or deposit accepted by any other person other than the above (1) Bank (2) Co-operatve Society and (3) Post Office (under the schme as mentioned above) is Rs.5,000/- or lesser than the said amount no Tax is to be deducted at source. Other persons - for example - Company, Firm, Trust, Association and Individual or HUF if the provisions apply in those cases.

Best Wishes

Sathikonda

p.s. please do not think otherwise for commenting on your language. Just you are like my student.

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Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 14 March 2012

Ms.Arpita

Coming to the other aspect of your question -

If you have deducted tax at source though you are not liable to deduct tax at source. The person can claim the credit for the same.

Best Wishes

Sathikonda

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Arpita (Works as an Employee) (143 Points)
Replied 14 March 2012

THANK YOU SIR..... I WILL SEE TO IT THAT I DONOT REPEAT THE SAME MISTAKE......THANK YOU SIR FOR CORRECTING ME.....AND ALSO SOLVING MY QUERRY....THANK YOU

CA SACHIN VIJ (Chartered Accountant) (112 Points)
Replied 14 March 2012

If you have deducted and deposited the TDS then person can claim the credit in his return of income.

However if you have deducted the TDS but did not deposit the same , kindly return the amount of TDS (wherever it was not deductible i.e. lower than eligible limit) to the respective persons.

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