Tds
This query is : Resolved
Neha Gupta
(Querist)
10 December 2013
Is TDS to be deducted on processing fees charged by banks?
Aditya Maheshwari
(Expert)
10 December 2013
SECTION 197A OF THE INCOME-TAX ACT, 1961
DEDUCTION OF TAX AT SOURCE
NO DEDUCTION IN CERTAIN CASES – SPECIFIED PAYMENT UNDER SECTION 197A(1F)
NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], DT 31-12-2012
In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, namely:-
(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 (MICR charges);
(vii) Credit card or Debit card commission for transaction between the merchant establishment and acquirer bank.
Loan Processing fees does not seems to be covered in the list mentioned by the notification.
DEDUCTION OF TAX AT SOURCE
NO DEDUCTION IN CERTAIN CASES – SPECIFIED PAYMENT UNDER SECTION 197A(1F)
NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], DT 31-12-2012
In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, namely:-
(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 (MICR charges);
(vii) Credit card or Debit card commission for transaction between the merchant establishment and acquirer bank.
Loan Processing fees does not seems to be covered in the list mentioned by the notification.
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