Applicability of TDS

[pran shangari]

assests purchased by a concern and financed by nonbanking finance cos the likes of Magma Finance, Tatamotors Finance or L & T Finance.The Insalment is payable monthly for a period of say 36 months.Will there be a need to deduct TDS.If Yes on what sum and under which section.

AI Summary

TDS Applies to Interest Paid on Installments for Assets Financed by NBFCs, Per Section 194A(3)(iii) of Income Tax Act. A query was raised about the applicability of Tax Deducted at Source (TDS) on installments paid for assets financed by non-banking finance companies (NBFCs) like Magma Finance, Tatamotors Finance, or L&T Finance. The response clarified that TDS provisions apply to interest paid to NBFCs, referencing clause (iii) of subsection (3) of section 194A of the Income Tax Act, 1961. The nature of the financial institution, whether a banking company or NBFC, is crucial in determining TDS applicability.