Double trouble: PMC Bank asked to deduct TDS on notional interest paid

CBDT asks lender to deduct tax at source on notional interest paid

Mumbai-based PMC Bank, which has defaulted on payments to its depositors, is facing double trouble. The Income Tax Department has asked the bank to deduct tax at source on interest paid on deposits, and submit it in the March quarter. 

The bank defaulted on repayments on deposits of Rs 9,000 crore last year and since then it is crediting interest to the deposit holders’ accounts to avoid law and order problems. 

PMC Bank collapsed last year because it lent a sizeable portion of its assets to real estate firm HDIL, which has collapsed since.

“The bank has no money left to pay interest