TDS on Bank charges to company

This query is : Resolved

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This discussion clarifies whether a firm needs to deduct Tax Deducted at Source (TDS) on bank charges paid to another company. Generally, if the company issues a GST invoice for these charges, TDS provisions will apply, unless the charges are a reimbursement of actual bank costs. The nature of the invoice (tax invoice vs. reimbursement) and the recipient's status are key factors in determining TDS applicability and any relevant thresholds.

jaya

jaya (Querist)
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07 May 2025 Hi,

if a firm pays Bank charges to a company (for which they raise bill with GST), do that firm has to deduct the TDS on it? if yes, then what will be the threshold?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 May 2025 No TDS applicable in case of the payment is of reimbursement of bank charges.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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08 May 2025 if you are paying it to a company, that is not a bank, then yes, normal TDS provisions will apply if they are raising a GST invoice. If it is a reimbursement invoice, then no TDS.

jaya

jaya (Querist)
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08 May 2025 the narration says " Being Dec'24 FOFO Exp-Bank charges" ...so still we consider it as reimbursement??

Nikhil Kaushik

Nikhil Kaushik (Expert)
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09 May 2025 it has nothing to do with the narration. the nature of recipient matters as well as whether the invoice is a reimbursement invoice of a commercial invoice..

jaya

jaya (Querist)
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09 May 2025 it says tax invoice in that case we need to do?

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