Applicability of TDS on Foreman Commission

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The discussion clarified that TDS may not apply on foreman commission deducted by KSFE from chit prize money, as the subscriber is not directly making the payment. The nature of deduction and contract terms should be verified for legal clarity.

Varsha

Varsha (Querist)
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25 January 2022 Whether TDS is to be deducted on Foreman Commission to KSFE ? Actually it is deducted from the prize money and balance only paid.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 January 2022 Though the query is not clear to me, but if it has already been deducted from prize money, question of deducting it again does not arise.
If any commission paid to any third party, it requires deduction as per law, without considering any earlier transaction/s.

Varsha

Varsha (Querist)
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25 January 2022 Sir,
When we get the prize money of chitty, we get the sum after deducting the entire forman commission only. We must deduct tds before making the payment. But in this case, the Chit funds give us the prize money after deducting the whole of foreman commission. Which means, if I deduct tds on the foreman commission, it will be like paying them more money than required.
Hope now the query is clear to you Sir....

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 January 2022 As the winner is not directly paying any amount to Foreman, he is not liable for any TDS.

Varsha

Varsha (Querist)
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25 January 2022 Okk. Sir....in order to legally enforce this, in case of any dispute, which provision shall we quote?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 January 2022 As per IT act there will not be any query, as you have not paid any commission. As per any contract with the KSFE, one need to study the contract first.

Varsha

Varsha (Querist)
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25 January 2022 Okk Sir.. Thank you very much for the response.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 January 2022 Most Welcome ...

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 January 2022 Foreman's commission is not an expense for the chit subscriber, hence TDS doesn't arise. Perhaps, KSFE recovered the GST which they have to pay on foreman's commission from the chit subscriber. Please confirm the nature of deduction and come back.

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