Dear Members
Are Bank Processing Charges (Fees) liable for TDS?
Thanks in advance..
C.A Alok Mukherjee
(service)
(462 Points)
Replied 16 June 2010
Interesting question. Had this payment be treated as Professional fees in nature, TDS applicable. But to my mind,it is the recovery of administrative cost for loan processing formality as same like other bank charge.
SRINIVASA MURTHY
(Asst Manager (Finance))
(186 Points)
Replied 16 June 2010
s, i agree with Mr. Alok.
for further details plz c the below given link, the discussion on the above subject /forum/tds-on-service-fee-to-scheduled-bank-13918.asp
G.M.Muthu
(Associate)
(54 Points)
Replied 16 June 2010
As far as TDS is concerned, the services availed by the client being of a professional nature involving proper financial appraisal, verifying the credit worthiness, asset particulars, securities provided, etc, it qualifies to be a professional service liable for TDS under Section 194J of the Income Tax Act, 1961.
However, Section 196 also covers only RBI not for all banks for non-deduction of TDS on any sums,
My opinion to deduct tax on such payment other than such payment to RBI
Aneesh
(Pursuing CA)
(101 Points)
Replied 17 June 2010
Any payments made to Bank(irrespective of what they might be) are not subject to the Provisions relating to TDS.
Please correct me if I'm wrong
G.M.Muthu
(Associate)
(54 Points)
Replied 17 June 2010
Aneesh
You can't say like that,
because income of bank not exempt from tax
Aneesh
(Pursuing CA)
(101 Points)
Replied 18 June 2010
Mr Muthu,
I agree that Income of Bank is not exempt from Tax, but Im still very certain that Loan Processing Charges or any such transactions are subject to TDS. Although I cant get the proviso as of now. Will let you know by today.
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