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TDS SECTIONS

Section

Description

Cut off

Individual/HUF

Other

Section

194A

Interest Paid By Others (On Loan)

Rs. 5,000 P.A

10 %

10 %

 

 


On Interest Expense
We have to deduct TDS @ 10 % on Interest Paid/Payable
Cut off Rs. 5,000 i..eTDS is applicable if Interest paid is more than 5000 in one year
Only Applicable if loan taken from friends and Related cos

TDS not applicable if loan taken from Banks or Financial Institution

Section 194A TDS on Interest - Rates of TDS

Interest on loan
Questions

Q.1

Loan taken from SBI Bank Rs. 5,00,000 @ 12% On 1 April whether TDS to be Deducted

View Answer

Q.2

Solve Question 1 Assuming loan was Taken From Ravi and Co. ( Rs. 5,00,000 @ 12% for 1 Year)
-a-

Interest paid = 5,00,000 ×12%
= 60,000
Since Amount Paid Is More Than 5,000 P.A.
TDS @ 10% Applicable

Entries

Entry for Loan Taken

Bank A/C Dr.           5,00,000
To Ravi Co. Loan A/C         5,00,000

Entry For Interest Exp.

Interest Exp. Dr.               60,000
            To Ravi Co. Loan A/C        54,000
             To TDS                              6,000

Entry For Amount Repaid

Ravi & Co Dr.      5,54,000
              To Bank             5,54,000


Section

Description

Cut off

Individual/HUF

Other

Section

194A

Interest Paid By Banks (on FD)

Rs. 10,000 P.A

10 %

10 %

On Interest Income

Bank deducts TDS @ 10 %

Cut off is Rs. 10,000 P.A

Only Applicable on Interest Income On Fixed Deposit (FD) and Recurring Deposit

interest paid by bank.png

Interest Income Questions

Question 1.

FD Made in HDFC Bank by transferring Money from HDFC Current Account
 Of Rs. 100,000 @ 8 % P>A> For ! year Whether TDS To  be Deducted ? Pass entries

View Answer

Question 2.

Solve Question 1 Assuming FD was of Rs. 3,00,000 @ 8 % P.A.

View Answer

            

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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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