Please let me know whether TDS is to be deducted from bill discounting charges or not? the charges as paid to the bank.
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TDS on bill discounting charges
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Discounting charges is in the nature of interest and therefore u/s 194A. All type of bank charges in connection with a loan or borrowing are categorised alongwith interest. You are not to deduct TDS U/s 194A for interest paid to bank.
The definition of interest is in Chapter I (prelimnaries) Section 2 (Definitions) Clause No.
(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 ;]
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