Dear Sir/Madam,
Kindly confirm me the TDS applicability for Annual Custody Fees paid to NSDL.
If yes please confirm me the Rate of TDS to be deducted.
TDS Applicability for Annual Custody Fees paid to NSDL
Replies (4)
Quick Summary
TDS is not applicable in this case
As per ITAT Hyderabad verdict Fees paid to NSDL/CDSL are not subject to TDS. hence you no need to deduct TDS while paying fee. and expense will be allowed completely.
It would have been a fee for technical service. but judicial verdicts have given that such passive, non-human services cannot be treated as technical service. hence it will not attract tds under any section.
Agree: no TDS. To add the basis:
• Custody fees to NSDL/CDSL are for a standard, automated facility available to all issuers at prescribed rates. The SC in CIT v Kotak Securities (2016) held that such charges paid to a stock exchange are not "fees for technical services", so Sec 194J does not apply. Tribunals apply the same reasoning to depository custody fees.
• It is not a contract for work, so Sec 194C does not apply either.
• GST at 18% is charged by the depository under forward charge, and ITC is available.
• Different for the RTA, DP or merchant banker: those are services, with TDS under Sec 194J (10% professional or 2% technical) or 194C depending on the contract.
• From 1 April 2026: Sec 393 of the Income-tax Act, 2025. No change in the position.
Recent Topics :
- Bill-to-ship-to material at client site, project c
- Export previously now to be considered domestic sa
- Pan surrender via online
- EPFO Portal Issue – Unable to Save Employee
- Plant & Machinary
- ITC reversal after supplier amended the recipient
- GIFTS TO USEFUL CONTACTS ON FESTIVALS INCOME TAX
- INTEREST ON REFUND OF TDS
- Input tax claim related
- User not found in MCA portal
Related Topics :
CAclubindia
