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Tds/tcs on gift article to consumer for brand promotion

shibsankar (Asst. Manager - Accountants) (119 Points)

15 November 2018

Hello Everyone,

Recently my company did a promotional activity where we gifted an item to a consumer.

We organised a small event at one of our Customer's showroom to handed over the gift to that consumer.

My query is TDS/TCS deductable on that, since it was a purely promotional cost ( Direct expenses)?

Thanks in advance.

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3 Replies

Mayur Patil (Article) (1276 Points)
Replied 15 November 2018

Which kind of event organized. Is it like game where customers have to play and get prize after winning.

If yes, then sec 194B attract if value of gift exceed rs.10000 and 30% TDS required to deduct.

If no, then there's not any provision regarding TDS should be deducted

shibsankar (Asst. Manager - Accountants) (119 Points)
Replied 16 November 2018

Hello Mayur,

Thank you so much for your reply.

It was not a game show. It was a lucky draw sales program. Consumers shared their stories on a feedback form while purchasing the product.

The best story got the prize.

So do we need to deduct TDS on that as well?

Thanks a lot in advance.

Mayur Patil (Article) (1276 Points)
Replied 17 November 2018

Should yes,

Advisable to deduct TDS if crossing above threshold limit. Lucky draw consider as gambling and gambling included in 194B.

If your prize in cash then you can deduct TDS from cash and prize is in kind then as per your terms and condition first you should collect cash from prize receiver or you can pay liability yourself on behalf of gift receiver.