TaxTMI 
TaxTMI 
There is a LLP firm which has taken unsecured loans from its partners and paid interest on the same. However it has not deducted TDS on the interest. Whether the firm is liable to deduct TDS on interest paid on unsecured loans taken from such partners?
TDS on interest on unsecured loans to partners
21 Sep 2019 
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TDS on interest: whether LLP must deduct on unsecured partner loans, with conflicting views under section 194A provisions.
Whether an LLP must deduct TDS on interest paid to partners for unsecured loans is debated. One view treats an LLP as a firm and applies Section 194A to require TDS on interest including unsecured loans. A contrasting view invokes Section 194A(3)(iv) as an exemption, concluding no TDS is required on interest paid to partners. The material records these conflicting practitioner opinions without resolving the legal question. (AI Summary)
Whether an LLP must deduct TDS on interest paid to partners for unsecured loans is debated. One view treats an LLP as a firm and applies Section 194A to require TDS on interest including unsecured loans. A contrasting view invokes Section 194A(3)(iv) as an exemption, concluding no TDS is required on interest paid to partners. The material records these conflicting practitioner opinions without resolving the legal question. (AI Summary)