TDS on loan processing fees payable to bankers

This query is : Resolved 

01 April 2008

What is the meaning of interest for TDS U/S 194A.If you suggest that meaning of interest as define in section 2(28A),whether we should deduct TDS on Processing Fess U/S 194J or not,If there are any case law, please advice.

Reetika Goel (Expert)
01 April 2008

As per section 2(28A), loan processing fee shall be included into interest amount and will be eligible for deduction u/s 24(b) of the IT Act, 1961.

Since it is considered as a part of interest and assessee is eligible for claiming its deduction considering it as interest charges, its TDS should be deducted and that is also u/s 194A.

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