Tds on processing fee charged by nbfc's

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Ravishanker (Querist)
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28 July 2012 Hello,

We have taken unsecured business loans from various NBFC's who have charged Documentation Charges, Processing Charges, Stamp Duty and Premature Loan Closing charges. We have paid TDS on interest on behalf of these NBFC's. Our Audtior's have put a qualifying note in their Report stating that we have failed in deducting TDS from Documentation Charges, Processing Charges, Stamp Duty and Premature Loan Closing charges.

While taking up the matter with the NBFC's they are of the opinion that TDS is paid only on Interest and not on other charges.

An opinion on this along with TDS Rules if any, will be highly appreciated.

Thanks in advance.

Ravishankar.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 July 2012 my view
Definition of Interest u/s 2(28A)

"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 ;]

so TDS applicable on all charges

Ravishanker

Ravishanker (Querist)
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01 October 2012 Thanks for the reply

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