TDS Applicability

[Ethirajan Parthasarathy]

One of my client is trading in equity with Margin trading facility extended by ICICI SECURITIES LIMITED Is he liable for TDS on interest charged by ICICI SECURITIES LIMITED which is not a Banking company

[shwetal oswal]

Yes, he is liable to deduct.

[PRIYACHARAN SR]

TDS on payment of interest , other than interest on securities is governed by section 194 A of the Income Tax Act. Assuming ur client is an individual or a Hindu undivided family,

*whose total sales, gross receipts or turnover from the business or profession carried on by him exceed [one crore rupees in case of business or fifty lakh rupees in case of profession] during the financial year immediately preceding the financial year in which such interest is credited or paid, he/she shall be liable to deduct TDS under this section.

In this regard please note the following:

1) If the above* condition is satisfied, then he shall be liable to deduct TDS under section 194A, provided the interest amount exceed Rs. 5,000 in a financial year.

2) However if the status of your client is other than individual/HUF , then TDS has to be deducted irrespective of the turnover in the Previous FY, .

* My View.

AI Summary

TDS Applicable on Interest Charged by ICICI Securities for Margin Trading per Section 194A of Income Tax Act A client engaged in equity trading with margin trading facilities from ICICI Securities Limited inquired about the applicability of Tax Deducted at Source (TDS) on interest charged by ICICI Securities, which is not a banking company. Respondents clarified that TDS is applicable under Section 194A of the Income Tax Act. If the client is an individual or Hindu Undivided Family (HUF) with sales exceeding specified thresholds, TDS must be deducted if the interest exceeds Rs. 5,000 annually. For entities other than individuals or HUFs, TDS must be deducted regardless of turnover in the previous financial year.