26 December 2014
There is no need to deduct TDS on interest i.e.,LC discounting charges payable to Bank. U/s 194 A interest paid to Bank does not attract TDS.
26 December 2014
Dear Mr. Satyanarayana, I like to open this query once again, as per notification no 56/2012 dated 31st December, 2012 the CBDT has exempt TDS provision for Payment towards i) bank guarantee commission, ii) cash management service charges, iii)depository charges on maintenance of Demat accounts, iv) charges for warehousing services for commodities v) underwriting service charges vi)clearing charges and vii) credit and debit card charges made to the banks which are listed in the Second Schedule of the Reserve Bank of India Act, 1934 (excluding Foreign Banks) can be made without TDS with effect from 1st January 2013.
And LC payments comes under definition of bank guarantee commission.
Therefore, LC charges paid foreign banks certainly comes under the TDS provisions under section 195 of Income Tax Act, 1961
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