pp govind ( General Manager(Fin)) (35 Points)
29 March 2013Please clarify whether TDS is required to be made interest (on loan taken from EXIM Bank) payments made to EXIM Bank. In my view, Exim Bank is not a Bank under Negotiable Instruments Act. It has come into being by an Act of Parliament in 1981. Exim Bank is a lender and my company is a borrower. If so, at what rate?
P P GOVINDACHARI
Mihir
(Wealth Manager)
(5293 Points)
Replied 29 March 2013
You cannot deduct TDS from interest paid to Bank. Even if its not under NI Act but is governed by Banking Regulation Act.
pp govind
( General Manager(Fin))
(35 Points)
Replied 29 March 2013
I agree with Mr Mihir that TDS is not required to be made for Banks coming Banking regulation Act. Exim Bank is set up by an Act of Parliament. Whether TDS is required to made on interest payments against loan taken from exim bank , If so , at what rate. It is an ECB loan denominated in Euros.
Mihir
(Wealth Manager)
(5293 Points)
Replied 29 March 2013
No Company is allowed to use the word 'Bank' in their names unless it is a bank approved and licenced by RBI. Even if it is enacted as an Act in the parliament, it does not become independent from the regulations of banking regulation act and RBI. It is still a bank. UTI is a mutual fund company even if it has been enacted as an Act in the parliament, and it is subject to the regulations of SEBI.
Mihir
(Wealth Manager)
(5293 Points)
Replied 29 March 2013
As per section 196 of IT Act, no deduction of tax shall be made from any sum payable to
1) Government
2) Reserve Bank of India
3) Corporation established by or under a Central Act
4) Mutual fund specified under clause 23D
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 29 March 2013
| Originally posted by : Mihir | ||
 |
As per section 196 of IT Act, no deduction of tax shall be made from any sum payable to 1) Government 2) Reserve Bank of India 3) Corporation established by or under a Central Act 4) Mutual fund specified under clause 23D |
 |
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 29 March 2013
Recently CBDT has issued a circular, which allows to any person dealing with bank, not required to deduct TDS
Ramanuj
(Accountant.)
(834 Points)
Replied 29 March 2013
No TDS is required if any paid to bank only.
pp govind
( General Manager(Fin))
(35 Points)
Replied 29 March 2013
I shall grateful if a copy of the cbdt circular is given in this regard
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