21 May 2010
Section 2(28A) defines interest to include any service fee or other charge in respect of moneys borrowed. Accordingly, if the loan processing fees is paid to a Banking Co. provisions of section 194A are attracted. S.194A excludes TDS to be made in the case of a Banking Co. and therefore no deduction of tax is to be made at source.
However, if the loan processing fees is paid to a NBFC TDS has to be deducted u/s 194A at the applicable rates.
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