Income tax on sales incentives (Income Tax)

This query is : Open

Kurmi

( Author )
13 May 2012

Dear all,

My co periodically gives sales incentives or taxable turnover to the customers for achieving sales target. This co makes the payment of all incentives through cheque.They are not adjusting sales incentives against future billing of the same client.So it is concluded there is totally monetary payment for achieving a sales target.My question is ;does it attract any tds liability on the co,since there is whole monetary payment.

CA CS Amit S. Kedia

( Expert )
13 May 2012

TDS will be deducted u/s 194H @10% on such incentive if the customers are selling goods on your behalf. The incentive given to customer is sort of commission on sales and TDS is required to deducted on such payment.

Sale shall be booked at gross amount in your books and the amount paid as incentive will be treated as selling & Distribution expenses.

Kurmi

( Author )
13 May 2012

Thanks for valuable feedback

Kurmi

( Author )
17 May 2012

Can you please refer any landmark judgement on the above situation.