LOAN PROCESSING FEES

Hi Dharmendra, It is simple. Account the Processing fees as Bank Charges. If you are thinking of capitalizing the Processing fee, It is WRONG as Borrowing cost can be capitalized only if the conditions specified under the relevant AS are satisfied. Secondly If I remember Correctly TDS on interest payments to banks/financial institutions are exempt u/s 194A.

HI FRANCIS THANX FOR GIVING UR TIME ,CONFUSION REGARDING LOAN PROCESSING FEE IS STILL THERE. CAN I AMORTISED IT DURING LOAN PERIOD

Hi Dharmenda, You are welcome. No. You cannot amortize the Processing fee. This is because the matching concept of expense recognition requires that expenses be matched with the revenues they generate over a time period. If expenditure incurred benefits more than one period (say n years), then an appropriate amount is expensed each year over this period. This is the principle behind depreciation/amortization. If expenditure incurred cannot be traced to revenue or will not benefit future periods (like your processing fee, Loss due to fire...etc) They are considered as Period costs and EXPENSED IN THE PERIOD IN WHICH THEY ARE INCURRED. So you cannot amortize processing fee. I hope this helps you. Bye & Goodnight.

Sir, Loan Processing fee is one time payment not to be recovered in any case even the surrender of the loan will not entitle u for refund, so be amortised in the year of payment only thnx

Processing fees ia not covered U/s 194 A bur it will fall under 194J, where no exemption is given

hello every body . plz clarify me regarding adjustment of TDS paid in one quarter in another quarter . whether the same adjustment can be made or not....

 

If, Processing Fees for CAR Loan then What?  Whether it can be capitalized in car cost?

 

When considering a loan from Kotak Mahindra Bank, it's important to factor in the loan processing fee. This fee is typically a percentage of the loan amount and is non-refundable. For Kotak Mahindra Bank, the processing fee usually ranges from 0.5% to 2.5% of the loan amount, depending on the type of loan and the borrower’s profile. It covers administrative costs and is charged upon loan approval. Always check the specific terms and conditions of your loan agreement with Kotak Mahindra Bank to understand all associated fees and ensure transparency in your financial planning.