tds - sec 194h & other, Income Tax

[SARVESH BALDI]

SIR

WE ARE CO. ASSESSEE & ENTERED INTO AN AGREEMENT WITH XYZ AGENT WHO WILL ACT AS CARETAKER , BRING US THE ORDERS , ACQURE BUSINESS & OTHER SERVICES.

ON SALE HE IS GIVEN A FIXED COMMISSION . THE AGENT PROVIDE US WITH 2 BILLS

1. OF SERVICE CHARGES - 40% OF COMMISSION

2. OF REIMBURSEMENT OF EXP. - 60% OF COMMISSION

NOW WE DEDUCT TDS ON 40% OF COMMISSION BUT WHAT ABOUT THE REIMBURSEMENT .ARE WE LIABLE TO DEDUCT TDS ON SUCH REIMBURSEMENT..

ALSO GUIDE WHETHER WE ARE LIABLE TO PAY TDS IF AGENT HAS DONE ABOVE EXP.OF WHATSOEVER NATURE LIKE MARKETING , CONVEYANCE ETC. WHICH WILL BE REIMBURSED BY US AS THE ULTIMATE EXP. BEARER IS PRINCIPAL.

Posts / Replies

[SUNIL INGALE]

As per the recent SC cases, commission arises only if there is principal agent relationship. In your case I do not see any principal agent relationship. Hence there is no commission. So TDS u/s 194h is not deductible.

We will have to examine whether TDS is deductible u/s 194C or not?

CA. Sunil G Ingale

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