Tds on jobwork by another unit of same company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2013 Dear Expert,

My company is have 2 units at 2 different places. PAN number is common for both the units but TAN number is different for both the units.

My 1st unit is doing jobwork for 2nd unit. Do I have to deduct TDS on jobwork done by 1st unit for the 2nd unit.

Will it be OK if i dont deduct TDS as the PAN number is common for both the units.

Thanks in advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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15 May 2013 Income and TDS will always arise between 2 different entities, not in same entity. one entity cannot earn on its own, so TDS will not apply inter-department or branch works

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srinivasan

srinivasan (Expert)
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15 May 2013 No need for TDS for inter unit transaction. Mr ramesh is correct

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Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2013 Sir,

Can u provide any notification or anything in writting, so that i can convince the auditors and the income tax peoples.

Thanks

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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16 May 2013 Basic Income tax applicability is One person earning income from others, no one can earn income from themselves. so no need to notification required to justify the basic concepts on income tax.

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srinivasan

srinivasan (Expert)
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20 May 2014 Mr. Ramesh is absolutely correct.

Its common that even inter unit sales transactions between two units are recognised as income by the respective units. But you knock of these transactions at company level during consolidation. So you need not confuse this as income chargeable to tax under income tax act. It is always between to persons and not otherwise.