Deductibility u/s 194 A

[Anup Kumar Grover]

Whether TDS u/s 194A is required to be deducted on payment to interest on taking finance from the Indiabulls, Reliance Capital, GE Money, Chholamandlum, whether these are financial institutions or other wise financing cos

AI Summary

TDS Mandatory on Interest Payments to NBFCs Under Section 194A; Exemptions Rarely Apply to Companies Like Indiabulls A query was raised about the requirement of Tax Deducted at Source (TDS) under section 194A on interest payments to companies like Indiabulls, Reliance Capital, GE Money, and Chholamandlum. Two responses confirmed that TDS is necessary as these entities are non-banking financial companies (NBFCs) and not banks or insurance companies. Exemptions to TDS under section 194A(3) exist, but they typically do not apply to these companies. It was noted that companies engaged in insurance might qualify for exceptions, but this is uncommon due to regulatory requirements.