Section 194A - Page 7

Beware of side effects of TDS on Interest of Deposits in Co-op. Banks w.e.f. 1st June, 2015

CA Umesh Sharma Arjuna (Fictional Character): Krishna, Income Tax Department has introduced the provision of TDS deduction on the Interest of Fixed Deposits of Co-Operative Banks in the Financial Budget of 2015-16. What are its effects and who will they affect? It seems that a lot many people will be in trouble on rural India!...

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Section 194A- Amendment in provisions related to TDS on interest

It is proposed to amend the provisions of the section 194A of the Act to expressly provide from the prospective date of 1st June, 2015 that the exemption provided from deduction of tax from payment of interest to members by a co-operative society under section 194A(3)(v) ) of the Act shall not apply to the payment of interest on time depo...

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Sec. 194A TDS not deductible on Hundi discount as it is not interest

DCIT Vs Shri Harnamsingh Kulbirsingh Maker (ITAT Mumbai)

During the course of the scrutiny the assessment proceedings the AO noticed that under the Head 'Finance Expenses' the assessee has debited an amount of Rs.91,30,250/- on account of discount on Hundi....

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TDS deductible on Excess amount paid on Cacellation of Flat Purchase Agreement

The Income Tax Officer (TDS) Vs M/s Beacon Projects P Ltd (ITAT Cochin)

In the instant case, the amounts were paid in respect of an obligation in respect of purchase of flat through agreement, therefore, no fault can be found on the part of the AO for treating these charges as interest and liable for TDS u/s 194A of the Act. ...

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FAQ on Miscellaneous issue in TDS U/s. 193, 194, 194A, 194B, 194BB, 194D, 194E, 194EE, 194G, 194LA, 194LB, 194LC

MISCELLANEOUS ISSUES (SECTION 193, 194, 194A, 194B, 194BB, 194D, 194E, 194EE, 194G, 194LA, 194LB, 194LC) Q.1.     Whether assessee liable to deduct TDS u/s 193 on provision of interest in case payee is not identified. Ans. Explanation to section 193 cannot be invoked in a case where person who is to receive interest cannot be identifi...

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Discounting charges of Bill of Exchange or factoring charges of sale cannot be termed as interest for TDS U/s. 194A

Income-tax Officer Vs M/s. M K J Enterprises Ltd. (ITAT Kolkata)

Interest is a term relating to a pre-existing debt, which implies a debtor creditor relationship. According to us, unpaid consideration gives rise to a lien over goods sold and not for money lent. This interpretation of ours is supported by the decision of Hon’ble Supreme Court...

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TDS U/s. 194A not required to be deducted on interest income of Societies registered under Societies Registration Act, 1860

Kerala State Nirmiti Kendra Vs Commissioner of Income-tax, Thiruvananthapuram (Kerala High Court)

In so far as Societies are concerned, only such of those Societies which are registered under the Societies Registration Act, 1860 are exempted. In other words, the terms of the notification itself show that a society like the petitioner which is registered under the Travancore-Kochi Literary Scientific and Charitable Societies Registrati...

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No TDS not on Payment of interest for delay in construction of Flats

CIT Vs H.P. Housing Board (Himachal Pradesh High Court)

CIT Vs H.P. Housing Board (Himachal Pradesh High Court) In the case in hand it stands proved that in case the houses were ready within the stipulated period the Board would not be liable to pay interest. When construction of a house is delayed there can be escalation in the cost of construction. The allottee […]...

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CBDT issued clarification on explanation to section 194A

Circular No. 3/2010-Income Tax 02/03/2010

Circular No. 3/2010-Income Tax CBDT clarifies that Explanation to 194A is not meant to apply in cases of banks where credit is made to provisioning account on daily/monthly basis for the purposes of macro monitoring only by the use of CBS software...

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