Tds on processing charges

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2014 We are paying Processing fees to a financial company after sanction letter is issued but before disbursement. Loan is subject to payment of processing fees. whether tds will be attracted on such processing fees paid to bank. Processing fees if Rs. 3 lacs. They have not charged any service tax on that amount.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

27 July 2014 If the amount is paid or credited to a banking company to which the Banking Regulation Act 1949 applies, TDS not required to be deducted.

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2014 No, it is not any bank, it is a private financial company, like SVB India. they given us loan 10cr, and incurred processing fees of Rs. 3 lacs for pass the loan. Please advise TDS point of view...

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

27 July 2014 Then TDS required to be deducted u/s 194J @ 10% on Rs 3 Lacs.

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