which amount of debenture interest does not attract text deducted at source?
Answers
Answer:
As per section 194A, no tax is to be deducted if the aggregate amount of interest during the financial year does not exceed Rs. 5,000. However, the limit of Rs. 5,000 is increased to Rs
Answer:
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Explanation:
Every person (i.e. the payer) other than an individual or a Hindu undivided family (HUF), who is responsible to pay interest (interest other than on securities) to a resident, is liable to deduct tax at source under section 194A.
However, an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him/it exceeds Rs. 1 crore in case of business and Rs. 50 lakhs in case of a profession1 during the financial year immediately preceding the financial year in which the aforesaid amount is credited or paid, shall be liable to deduct tax under section 194A.
Illustration
Mr. Kumar is running a plastic factory under proprietorship. The total turnover of the factory during the financial year 20119-20 amounted to Rs. 84,00,000. On 1-4-2020, he took a loan from his friend who is residing in Mumbai (the funds were used in business). Interest on loan for the financial year 2020-21 amounted to Rs. 50,000. Should Mr.
Kumar deduct tax from interest of Rs. 50,000?
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