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Tds on bank processing fees should be deduct or not

CA Umesh kumar Mantri (Business and Practice) (132 Points)

05 May 2014

TDS should be deduct or not on Bank Processing Fees U/s 194 J.

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5 Replies

PRITAM JAIN, CA , CS (Practising CA CS) (398 Points)
Replied 05 May 2014

Banks are out of the purview of any tds deduction

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Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2015 Points)
Replied 06 May 2014

as per section 194 A any payment made to following are not under obligation to TDS.

* Banks, co-operative society in banking business

* LIC

* UTI

* a company or co-operative society engaged in insurance business

* any financial corp. established by central, state act.

and so on

HENCE INTEREST, PROCESSING FEES PAID TO BANK ARE NOT UNDER OBLIGATION TO TDS

CA Umesh kumar Mantri (Business and Practice) (132 Points)
Replied 06 May 2014

Mr. Tax pandit

Section 194 A only for interest and Processing fees are not part of Interest so its not cover in sec.194 A.

ANd Mr.PRitam Jain

I know bank out of TDS Purview but can u tell me or reffer any circular or notification either income tax act or banking reg. act. , in which mentioned there is no deduction of TDS liability on Processing fees.

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 06 May 2014

Umesh,

I invite your attention to section 197A(1F). Following payments, inter alia, made to a bank excluding a foreign bank will not be subjected to TDS under section 194J:

bank guarantee commission

cash management services

depository charges

MICR charges.

Thanks,