Tds on loan processing fees paid to nbfc
Querist : Anonymous
Processing fees can not be termed as interest.
"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.
Proceesing fees to bank is paid after sanction letter is issued but before the disbursement of loan amount. Loan is subject to payment of processing fees.
Processing fess is paid to borrow the money and not as compenasation after borrowing the money.
Accordingly, in my very personal opinion TDS is not required.
Querist : Anonymous
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