Tds on commission paid to bank

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2013 whether TDS is required to be deducted on commission paid to bank for making the letter of credit?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

11 February 2013 - As Reported by Financial Express 05-01-2013
The Central Board of Direct Taxes said in a notification that from January 1, payments received by banks for seven specified services are exempt from TDS obligation.
These include payment received as bank guarantee commission, cash management service charges, depository charges on maintenance of Demat accounts, charges for warehousing services for commodities, underwriting service charges, clearing charges (MICR charges) and credit card or debit card commission for transaction between the merchant establishment and acquirer bank.
Such payments can be made without TDS, the notification said.

Message likes : 1 times

CA Prashant Gupta

CA Prashant Gupta (Expert)

11 February 2013 agree
and in practical, bank deduct this commission from your account, so how can you deduct TDS
but you must see the notification

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2013 Dear Prashant sir the LC is not made by my regular bank as per the agreement with buyer the buyer is required the LC with other bank.

CA Prashant Gupta

CA Prashant Gupta (Expert)

12 February 2013 Dear Author
please read my last line. see the notification mentioned by CA Paras Bafna. you don't need to deduct TDS on bank commission.

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