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Tds on emi !

Shivani (Learner) (1881 Points)

06 March 2016

Dear Friends

Please guide me on something i am not aware of at all.

If i am paying monthly EMI of Rs. 3,00,000 to Indiabulls on loan taken from it.

In this EMI principal component is Rs. 1,75,000 and interest component is Rs. 1,25,000.

My question is do I need to deduct TDS on the interest portion and pay to Indiabulls after deducting TDS.

Is there any section on this?

Please help

Regards

Shivani

shivaniadream @ gmail.com

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12 Replies

ANAND (CA) (133 Points)
Replied 06 March 2016

I suppose this is home loan. There is a specific exemption in TDS provision which says no tds to be deducted on payment of interest to bank & nbfcs by individuals

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Shivani (Learner) (1881 Points)
Replied 07 March 2016

Dear Sir

Its a loan taken by non-individual from Indiabulls (NBFC) and its for hotel.

Regards

Aarav Sharma (Freelance Writer) (21 Points)
Replied 07 March 2016

Hi Shivani,

Only commercial entities are liable to deduct and pay TDS. It is not applicable to the general public.

Regards,

Aarav

(Guest)

Yes, you are liabile to deduct tds U/s 194A at 10% and deposit to the government account. If it is not done, 30% of interest will be disallowed from your expenditure u/s 40(a) (ia).

MANOJ CHANDRA SHARMA (JOB) (59 Points)
Replied 07 March 2016

Practically India Bulls have taken the PDC of the EMI and India Bulls will deposit the same with the whole amount of EMI.

You have to deduct the TDS on interest amount on each EMI as it is fall under section 194A.

Submit the Form 16A to the india bulls and raise a Debit Note of the Same .India Bulls will refund the same to the borrower.

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Shivani (Learner) (1881 Points)
Replied 07 March 2016

Dear Manoj Sir

Suppose Interest component of EMI is Rs. 100000 then will the company who has taken loan deduct TDS @ 10% i.e. Rs. 10000 and pay 90000 to Indiabulls.

But your reply seems to suggest that Indiabulls has already taken Post dated cheque of Rs. 100000 from company (borrower).

now if company has already given PDC of Rs. 100000, then who needs to deposit TDS to government?

Regards

MANOJ CHANDRA SHARMA (JOB) (59 Points)
Replied 07 March 2016

Borrower will deposit the TDS on account of Lender and submit the Form 16A to India Bulls, they will refund the TDS amount as company has already paid the whole amount without TDS .

Shivani (Learner) (1881 Points)
Replied 08 March 2016

Dear Manoj Sir

thank u for ur reply.

But one question sir, why India Bull taking the PDC of gross amount,

Why not give them PDC after deducting TDS?

Regards

shivaji prasad bhimavarapu (CHARTERED ACCOUNTANT) (2391 Points)
Replied 08 March 2016

Desr Shivani, Pl mention the status of the payer also. Is he an individual or HUF and having business/ profession which is not liable to Section 44 AB AUDIT ?