Bookmarks   Feedback   Annual Subscription   New User   Login  
Tax Management India .com   
   TMI - Tax Management India. Com   
Addition u/s 68 - the loan which has been returned to the respective creditors cannot be taxed in the hands of assessee as its income - Tri    *    CENVAT credit - dumpers/ tippers will be in the nature of inputs for providing Supply of tangible goods services & not capital goods Tri    *    CENVAT CREDIT ON CERTIFIED COPY OF BILL OF MISC. CHARGES ON FINALIZATION OF BOE    *    Captive consuption to be shown in ER-1 Return filed through ACES system -reg    *    Travelling expenses incurred outside India by on duty employee whether taxable?    *    should i buy machinery after gst or before gst which will be benefit for me    *    After GST - Machinery booking on commission    *    Applicability Of Service tax on Liquidated Damages    *    Dr. Liam Fox, U.K. Secretary of State for International Trade calls on the Union Finance Minister Shri Arun Jaitley: Both the leaders call for forging deeper trade and investment arrangements between the two countries    *    Notification of Protocol for amendment of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, and for the encouragement of mutual trade and investment between India and Mauritius    *    Scheme of Rebate of State Levies on Export of Garments 2016    *    CENVAT CREDIT    *    Cenvat credit on water treatment plant    *    Excise Cenvat credit on Electricity Power bill    *    Regarding cenvat credit on service tax on rent a cab    *    Service tax exemption for transportation of life saving medicines    *    Employees sent on deputation to subsidiary/ associate companies (Service Tax)    *    Workshop on Government E-Marketplace (GeM) for Suppliers for E-Procurement    *    Ms. Penny Pritzker, U.S. Secretary of Commerce calls on the Union Finance Minister Shri Arun Jaitley: Both the leaders discussed the measures to increase the bilateral trade among the two countries.    *    Potato Chips as Namkeen    *    LTC exemption for travelling to Sri Lanka    *    Amendment in Notification No.78/2014-Customs (N.T.) dated the 16th September, 2014
 
Discussions Forum
Home Forum Income Tax
← Previous Next →

TDS on processing fees paid to bank - Income Tax

#1 Issue Id: - 3930
Dated: 21-3-2012
By:- PARAMESWARAN K L
TDS on processing fees paid to bank

  • Forum

We are paying Proceesing fees to bank after sanction letter is issued but before disbursement. Loan is subject to payment of processing fees. whether tds will be attracted on such processing fees paid to bank.

Post Reply

Posts / Replies

 

#2 Dated: 22-3-2012
By:- PRADEEP DUBEY

I think payment of processing fee will not attract tds.

Pradeep Dubey


#3 Dated: 22-3-2012
By:- MOHAN S

Mr.Parameswaran you ahve raised a very good point and this, in my view has not been so far tested anywhere. While the interest paid to banks is expressly excluded from TDS u/s 194A the processiong fee would not fall under 194A and Banks can not claim it as exempted. In my opinion "processing fees" will fall under Section 194J payment towards technical or professional services. The Government has notofied certain services u/s 194J as "Professional Services" but the banking services is not found there. It is a moot point if the payment will fall under Section 194C of the Income Tax Act. As there is no clarity on exemption it is suggested that the assessees are advised to deduct tax u/s 194J of the Income Tax Act to avoid any dispute late provided such "Processing Fees" exceed the threshold limit of Rs.30,000 as prescribed now. If it is below Rs.30,000 in any case tax need not be deucted. I invite all professionals to give their views.


#4 Dated: 23-3-2012
By:- RAMESH VENKATESAN

I will go with Mohan as logically, processing fees paid on business loans taken from Banks or other Financial Institutions can be considered for deduction of Tds u/s 194J.However  Tds  need not be deducted on processing fees paid for Housing loans as the fees will be capitalised with the cost of the house purchased. 


#5 Dated: 25-3-2012
By:- GOPALJI AGRAWAL

Since processing fee is covered under the meaning of interest as defined u/s 2(28A) of the IT Act  to my view hence it need no further explanation and no TDS provisions apply if paid to banks.


#6 Dated: 25-3-2012
By:- MOHAN S

Thanks Gopal ji. I did not see the definition of the term "interest' under the IT Act. Thanks for enlightening me. Now it is clear that TDS will not be applicable as Banking companies are exempt from TDS u/s 194A.


#7 Dated: 27-3-2012
By:- Surender Singhal

In my opinion processing charges are in the nature of interest and included in the definition of interest as stipulated u/s 2(28A) "interest" means interest payable in any manner in respect of any money borrowed or debt incurred (including deposit, claim or other similar rights or obligation) and included any service fee or other charge in respect  of the money borrowed or debt incurred or in respect of any credit facility which has not been utilised.

and there is no requirement to deduct TDS from payment of interest to any Bank.

 

Hope this will be useful to you.


#8 Dated: 14-5-2012
By:- Dinesh Sagade

If the Processing fees are paid to the NBFC, will it attract TDS u/s 194J


#9 Dated: 17-5-2012
By:- Surender Singhal

Yes as per section section 2(28A) interest includes processing fee, if interest payment made to NBFC is liable to deduction of tax at source, then same is the case with processing fee.


#10 Dated: 17-5-2012
By:- meil megha

On processing fees TDS will not attract as per Section 194A


#11 Dated: 18-5-2012
By:- Dinesh Sagade

As per Sec 194A if Interest (which includes Processing fees ) is paid to the banking company regulated by Banking Regulation act, it is exempt from TDS deduction ,but since the NBFCs are not governed by Banking Regulation Act, interest paid to NBFCs is subject to TDS deduction u/s 194A


#12 Dated: 23-4-2015
By:- ajay chharia

TDS ON PROCESSING FEE/SERVICE CHARGES IN RESPECT OF LOAN FROM BANK/ NBFC

IN MY OPINION

​As defined u/s 2(28A) interest includes any service fee or other charges in respect of moneys borrowed or debt incurred or in respect of credit facility which has not been utilised;

as per above definition processing charges are part of interest hence TDS will be dedutible as per sec 194A.

In case payment is to a bank same is exempt as per sec 194A (3).

In case payment is to NBFC TDS is deductible u/s 194A


#13 Dated: 24-6-2015
By:- swatantra singh

Bank Loan Processing Fees To Non Banking Financial Companies (NBFC)

For interest payment to NBFC TDS will be U/S 194J and for other then Interest to NBFC it will be U/S 194A

​Where as in case of Bank loan processing fees will be exempt from TDS as Banking Company is Exempt from TDS U/S 194A


Post Reply



 

← Previous Next →
what is new what is new

Advanced Search

Latest Updates

Forum

Featured

Experts

More Options

Communication




|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map || ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version