Tds - deduction

This query is : Resolved

suresh (Querist)
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29 April 2014 Dear experts

Please guide me we have paid EMI to Financial instution after deducting TDS for Interest portion But When precloser of our loan TDS is to be deduct for Preclosure charges? Please advise me

Advance Thanks for your valuable reply.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 April 2014 no as tds is only deducted on int portion.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 well yes as such TDS is applicable on pre-closure charges when paid to non-banking financial institutions.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 April 2014 well nikhil suresh have specifically asked abt financial instituition.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 Well Tushar, what did I say...and assuming that I have to include banks, then Interest /closure charges wont attract TDS anyways. Only in case of non-banking financial institutions TDS would apply.

Given that the querist is deducting TDS on EMI, it is safe to assume it is a non-banking financial institution. Accordingly, TDS shall also apply on closure charges.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 April 2014 pls read the first line when query starts
"we have paid EMI toFinancial Institution..."then?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 please read "after deducting TDS"

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 further if were to assume that it is a bank, then your first reply is wrong. so pick your sides. My answer is simple. TDS is applicable on closure charges to non-banking financial institutions (which appears to be the case here).

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