TDS on Processing Fees of Bank

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Ashish Ranade

Ashish Ranade (Querist)
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06 October 2009 Can anybody help me w.r.t whether TDS needs to be deducted on Processing Fees charged by bank

Aditya Maheshwari

Aditya Maheshwari (Expert)
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06 October 2009 Generally no TDS is liable for banks as noone deducts for bank charges also.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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06 October 2009 Hi Ashish,

Banks only enjoy exemption from TDS u/sec 194A ( Interest other than interest on securities) and in case of any other payments like Commission /Brokerage/Technical fees etc TDS is deductible as there is no special status for Bank.

Only point is which section will cover the payment of processing fees. Would like other learned experts to join this.

C A Anjani Kumar mundhra

C A Anjani Kumar mundhra (Expert)
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06 October 2009 no need deduct tds from banks

K V Subba Rao

K V Subba Rao (Expert)
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06 October 2009 Specific provision exists for not affecting TDS on payment of INTEREST to Bank u/s 194A (Ref: Para 156 of 32nd edition of Singhannia's Ready Reckoner)

Practially, TDS is not affected on Loan Processing Charges also, perhaps, taking shelter under above provision

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