Applicability of section 194h

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Padmanabha Rao (Querist)
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05 November 2012 The assessee is a dealer & distributor of Vodafone company Recharge Coupons & Sim cards. He has paid incentives of Rs.10 Lakhs and Discounts of Rs.7 lakhs for selling RCs & Sim Cards to retailers & shopkeepers. And received incentives of Rs.11 Lakhs from company. Please explain the applicability of provisions u/s 194 H of the act with reasons.

Thank you.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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06 November 2012 Please note Discount is not covered by the section 194h.

as per 194h
commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

therefore as per the definition it is clear that incentives are not commission

So no TDS is required on the Incentives as well as Discount.