AMENDEMENT TO SEC 40(a) (ia)

[VEMULA CHANDRASEKHAR]

Dear Members

I have a case under scrutiny for the assessment year 2013-2014. The assessee has not deducted Tax on Interest payments to NBFC. The ITO would like to add the interest paid under section 40(a) (ia) to the total income. I argued before ITO that section 40 (a) is amended to include a proviso where in if the assessee can get form 26A from the resident payee certified by a chartered accountant then addition shall not be made. But the assessing officer says the provisions are applicable from the assessment year 2014-2015. Kindly guide me in this regard

AI Summary

TDS non-deduction on interest: proviso permits exception where Form 26A certified by a chartered accountant is obtained. Amendment to section 40(a)(ia) creates a proviso allowing exclusion from disallowance for interest paid to a resident payee if the payee provides a specified form certified by a chartered accountant; the central issue is whether that proviso applies to the assessment year under scrutiny or only to later assessments.