TDS

This query is : Resolved

Share Report Follow Query Ask a Query

Pankaj Gupta

Pankaj Gupta (Querist)
Follow

16 July 2009 please advise whether TDS u/s 194C/Jis deductible on Finance charges to IDBI Bank Ltd.

Guest

Guest (Expert)

16 July 2009 Finance charges is treated as contractor charges but if IDBI have appointed special persons like CA and totally professional thn in that case you should be treated as Professional.

As my opinion deduct TDS U/s 194C.

taxindiaconnect

taxindiaconnect (Expert)
Follow

16 July 2009 I do not agree with both the above opinions expressed by the experts. Section 194A(3)(iii)(f) provides as in this regards that the Interest credited or paid to such institutions association or body corporate which the central govt. may for the reason to be recorded in writing notify be exempt from TDS. The Notified institution for this purpose are notified by various notifications issued by CBDT. For the list of such institution please see the page no 3.202 of taxmann master Guide to Income tax 18th Addition / 2008.

The definition of Interest has been provided in section 2(28A) of the Income tax Act as following .

"interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised;

According to this definition the interest includes any service fees or other charges in respect of the money borrowed or debt incurred. An upfront fee paid to a bank is nothing but service charges paid to bank as service fees or other charges in respect of moneys borrowed.

Hence no TDS is applicable on such payments.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

zafar chandwale

Partha Pratim Sen

Akash Sawant

John Ravindran Moses

Shashank S Gore

Subscribe Now

TDS

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Accountant

GST CONSULTANT

CA Final

Article Assistant

Manager- Finance and Compliance

GST CONSULTANCY