Tds on loan processing fees paid to nbfc
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 August 2012
Whether TDS is applicable on loan processing fees paid to NBFC? and under which section?
07 August 2012
TDS is not deducted on processing fees charged by NBFC.
Processing fees can not be termed as interest.
Processing fees can not be termed as interest.
07 August 2012
Section 2(28A) -
"interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised.
Proceesing fees to bank is paid after sanction letter is issued but before the disbursement of loan amount. Loan is subject to payment of processing fees.
Processing fess is paid to borrow the money and not as compenasation after borrowing the money.
Accordingly, in my very personal opinion TDS is not required.
"interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised.
Proceesing fees to bank is paid after sanction letter is issued but before the disbursement of loan amount. Loan is subject to payment of processing fees.
Processing fess is paid to borrow the money and not as compenasation after borrowing the money.
Accordingly, in my very personal opinion TDS is not required.
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 August 2012
Thanks for the reply
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