TDS on "Interest on late payment"

[raj kumar rungta]

Dear Professional Collegues

Can anybody advise us if TDS is applicable on the following:

A company has purchased goods from its supplier. however it could not make the payment in due time. The creditor has charged interest on the company for delayed payment.

Now we want to know whether such interest attracts TDS liability or nor.

Thanking You.

R K Rungta & Associates

[KIRTI TULSYAN]

REPLY 1

Dear Sir, 
As per section 194A " any person not being an individual or a HUF who is 
responsible for paying to a resident any income by way of interest, other 
than interest on securities, is required to deduct tax thereon at the rates 
prescribed , at the time of credit of such income to the account of the 
payee or interest payable account or suspense account or at the time of 
payment thereof, in cash or by issue of a cheque or draft or by any other 
mode, whichever is ealier, 
Therefore in your case the same will be liable to TDS if the total amount 
of interest exceeds the prescribed limit TDS will be deducted on the same. 

Regards 
CA Rinki Todi 

REPLY 2

Yes, the payment of interest for delayed payment will attract TDS 



CA S K Choudhary 

9830096237 

--

Best Regards, 
Kirti Tulsyan
B.Com.,ACA,CS


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