Tds on reimbursement of legal expenses of bank

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elangovan (Querist)
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07 January 2016 Bank has debited Rs 50000 towards payment to their lawyer for Joint Documentation, vetting and document preparation for CC /Term loan sanction.

I would like to know whether the company is required to deduct TDS in this case, Whether ST under RCM will be applicable for the company.

Thanks in Advance

Ankur Singhal

Ankur Singhal (Expert)
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07 January 2016 Dear
You are not required to any statutory liability. The bank will itself deduct the TDS and ST. You only need to pay the bank charges to the bank nothing else on your part is required.

elangovan

elangovan (Querist)
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07 January 2016 In the Bank Statement it is mentioned as "Neft to ****ar" (Name of the Advocate) and not as Bank Processing Charges

Ankur Singhal

Ankur Singhal (Expert)
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07 January 2016 Dear
Ask from the bank whether they have deducted TDS on the same.
IN my opinion bank would have complied with all the statutory obligations.
Sorry it will not be shown as bank charges in statement.

elangovan

elangovan (Querist)
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07 January 2016 In case if the bank has not deducted TDS, would that mean the TDS liability is transferred to the company?

Ankur Singhal

Ankur Singhal (Expert)
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07 January 2016 Dear
It is not possible. In this case the liability to deduct TDS is of the bank not of you.

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