Difference between sales incentive & salescommission

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Krishna (Querist)
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08 February 2016 Please Clarify me the difference between Sales Incentive & Sales Commission. and whatis the tax liablity ?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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08 February 2016 The term 'commission' refers to monetary compensation paid to the sales team based on a percentage of the sales price or a set amount for selling a product.
'Incentive' on the other hand is typically used more broadly to describe a commission and many additional forms of remuneration including additional pay, commission, discount, gift coupons, etc.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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08 February 2016 Sales Incentives paid within in the organisation to boost turnovers by fixing target.

Sales commission paid to external agencies like stockists, distributor, retailers etc.

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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09 February 2016 Even Mr. Kaviraja's reply looks to be perfect. Normally incentives are paid to employees and commissions are paid to outsiders in the business as well as directors of the company in case of a company registered under the Companies Act.

Krishna

Krishna (Querist)
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23 February 2016 If any company paid sales Incentive ti his employee on the basis of sales, is there any tax liability arises?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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23 February 2016 Sales incentive paid to employee forms part of the salary income and taxable under the head 'income from salaries'

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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23 February 2016 Incentives, bonus are part of salary. Hence it is tax able under the head salary.

Krishna

Krishna (Querist)
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05 March 2016 thanks sir.....................