TDS
This query is : Resolved
21 May 2010
Dear Members,
Would like to know whether tax needs to be deducted at source from payments made to Banks/Finance Companies towards Loan processing Charges?
Would like to know whether tax needs to be deducted at source from payments made to Banks/Finance Companies towards Loan processing Charges?
CMA.Palani Arumugam
(Expert)
21 May 2010
Section 2(28A) defines interest to include any service fee or other charge in respect of moneys borrowed. Accordingly, if the loan processing fees is paid to a Banking Co. provisions of section 194A are attracted. S.194A excludes TDS to be made in the case of a Banking Co. and therefore no deduction of tax is to be made at source.
However, if the loan processing fees is paid to a NBFC TDS has to be deducted u/s 194A at the applicable rates.
However, if the loan processing fees is paid to a NBFC TDS has to be deducted u/s 194A at the applicable rates.
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taxindiaconnect
(Expert)
21 May 2010
Agree with Arumugam
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