abhishek (Audit Executive) (44 Points)
26 February 2012In Case an individual is subject to tax audit , wheather he should deduct tds u/s 194 A on the loan amount taken for the purpose of investment in private company in which such individual is a director.
Also what is the cosequences if tds is not deducted and any other remedy to avoid disallowance.
CS Alok Mishra
(Income Tax Practitioner)
(786 Points)
Replied 26 February 2012
Yes Abhishek , if individual is subject to Tax Audit u/s 44AB during last p. Yera then TDS will have to be deducted.
Consequences of not deducting TDS will be
1. He will be Assessee in default which attracts penalty and interest u/s 221 and 220 resp.
2. If he will not deduct TDS then simple interest @ 1% for every month or part thereof from the date on which it was deductible till the date of deduction will be charged on Tax (TDS) amount.
3. Also 1.5% p.m. or part thereof will be charged from the date of deduction till the date of deposit on TDS amonut.
4. Most harsh fact about this is that where tax has not been paid after it is deducted, amount may be recovered by govt. by selling all assets of the assessee.
abhishek
(Audit Executive)
(44 Points)
Replied 27 February 2012
wheather tds would be applicapable even if loan is borrowed not for business but for purchase of house property?
CS Alok Mishra
(Income Tax Practitioner)
(786 Points)
Replied 01 March 2012
Abhisek ji TDS will not be deducted if u have bought the loan for personal purpose.
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