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Tds on bill discounting charges

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Querist : Anonymous

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Querist : Anonymous (Querist)
08 May 2013 As a finance company, in their business of Bill discounting,making payment to the vendors for Rs. 98/- against bill of Rs. 100/- and collecting Rs. 100/- from the client.

Below is the scheme of entries in books of finance company:

Loan A/c (Asset) - Rs. 100/- Dr.
Bank A/c - Rs. 98/- Cr.
Upfront interest(income)- Rs. 2/- Cr.

Please advise whether vendor has to deduct TDS on discounting charges of Rs. 2/- or not.

Secondly, this is called interest of discounting charges income in books of lendor.
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CMA Ramesh Krishnan

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CMA Ramesh Krishnan (Expert)
26 August 2013 If charges paid to bank then no TDS
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CMA Ramesh Krishnan

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CMA Ramesh Krishnan (Expert)
26 August 2013 If charges paid to bank then no TDS
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