TDS U/s 194A on vehical loan, Income Tax

[HIMANSHU JARIWALA]

Dear All

Is any TDS required on intrest payment on vehical loan taken from financial institution like "Sundaram Finance". I heard that earlier it was exepted but ti is withrawn in current year.

Posts / Replies

[Razesh Sharma]

If the assessee is an individual not falling within the purview of tax audit, there is no TDS liability.There are certain exemptions to Sec 194A for TDS deduction on interest other than interest on securities.
In case if the interest is paid to Banking Company, Public financial institutions, co-operative society engage in the business of banking. Then there is no need to deduct the TDS on interest paid. just check Sundaram Finance whether  is covered as public financial institution. 

[Sathish Kamath]

Tax Deductor is required to deduct tax at source @ 10% u/s194A from the payment of Finance charges or any other charges paid to Sundaram Finance Ltd for availing vehicle loan, if aggregate of such sum exceeds Rs.5,000 in a year. If the Company produces Nil deduction certificate from their Jurisdictional Assessing Officer (TDS) to the tax deductor then TDS need not be made by the tax deductor. If lower TDS certificate is produced then TDS shall be made at such lower rate.