A government corporation has taken a loan (Rs. 75 lacs) from government of state and paying interest @ 10%
Whether Tax has to be deducted at source for the interest amount.
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TDS on interest on loan
Replies (8)
Mr.Praveen,
Certain institutions are specifically exemprted outaright from the application of tax ddeduction out of inteest paid tro them. One such institution is gaovernment ora Corporations creazted by govedrnment by an act of legislature. Normally government does not interact diredct and only corporation or other spedcific instritutions intended for each specific purpose co-ordinate. In the situation projected byu you, it is presumed that the loan in question has been obtained by one government owned entity from another institution backed by the government. The recipient entity (payee)is entitled to receifve the interest without deductrion. Kindly refer to section 194A (3) with sub sections (iii)(b) thereof. In this back ground, there is no obligation to deduct tax at sourace.
No TDS is to be deducted while making any payment to Central or State Govt.
no TDS vil be deducted here..
| Originally posted by : RADHIKA JALAN | ||
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no TDS vil be deducted here.. |
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No need to deduct TDS coz, ultimately that money will go to the Govt. itself!!!!
Liability of TDS doesnt arise if the payment is towards any government.
no tds is required to be deducted in the given case
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