tds on earnest money refund along with assured return, Income Tax

[satbir singh wahi]

the pvt ltd co. is receiving earnest money for allotment of plot. after the maturity of time period i.e 5 yrs, the amount is refunded along with assured return. whether tds u/s 194A is applicable on the difference amount, total amount received and amt refunded.

Posts / Replies

[Mukesh Kumar]

The provision of section 194A are applicable on Interest. The amount which represents interest is subject to TDS. Earnest money, if not in the nature of interest, should not be subject to TDS.