DEDUCTION OF TAX FROM PAYMENT OF INTEREST U/S 194A

[CA.ANCHAL RASTOGI]

1. A COMPANY HAS TAKEN CAR LOAN FROM TATA FINANCE LIMITED. IS CO. LIABLE TO DEDUCT TAX U/S 194A ON INTEREST PAYMENT TO TATA FINANCE? 2. A COMPANY HAS TAKEN LOAN FROM INDIA BULLS FINANCIAL SERVICES. WILL SEC 194A BE APPLICABLE IN THIS CASE ALSO?

AI Summary

Debate on Section 194A: Should TDS Be Deducted on Interest Payments to NBFCs Like Tata Finance and India Bulls? A query was raised regarding the applicability of Section 194A of the Income Tax Act on interest payments made by a company to Tata Finance Limited and India Bulls Financial Services. One respondent clarified that Section 194A(3) provides exceptions where Tax Deducted at Source (TDS) is not required, and it is the borrower's responsibility to determine if the lender qualifies for these exceptions. Another respondent argued that TDS should generally be deducted on interest payments to Non-Banking Financial Companies (NBFCs) like Tata Finance and India Bulls, advising companies to verify any certificates for reduced or non-deduction of TDS.