Search Results For: 80HHC


QUERY: Mr. Champaklal seeks further advice from you on behalf of his clients.

(a) One of Mr. Champaklal’s clients is a financier and he has asked him whether section 194A would apply to Bill Discounting Charges paid by him to another financier. Mr. Champaklal seeks your advise in the matter

(b) The same financier client of Mr. Champaklal also wants to know whether the difference between price and face value of Commercial Paper is to be treated as interest or as discount. Mr. Champaklal seeks your advice in this matter also.

(c) Taking a cue from an exporter whose writ petition (in respect of 80HHC matter) had been handled by him. Mr. Champaklal has started the practice of levying interest in his Memo of Fees itself in respect of some of his regular clients who are regularly irregular in payment of his fees. His clients have enquired as to whether they would be liable to deduct tax at source u/s. 194A in respect of the interest charged by him.

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CBDT Cir.No. 65{F. No. 275/79/TTJ] dt. 2/9/71.

“Where the supplier of goods makes over the usance bill/hundi to his bank which discounts the same and credits the net amount to the supplier’s A/c. straightway without waiting for realization of the bill on due date,