Hi Kishan,
LT loan interest is capitalised so it is treated as payment. Hence, we must file WHT when we book the interest expenses.
For ST loan, for simplicity reason, we follow the same basis, i.e. file wht base on booking. Most importantly, in the tax audit, the tax officer is questioning interest expenses deduction with no wht filed for prolong period.
In short, we shall file wht base on booking to avoid any confusion and keep it simple.
Let me know if you have any clarification.