TDS

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balaji (Querist)
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27 May 2010 Hi all.... Our client is a private ltd company engaged in hotel business. They allow discount of 15% to credit card holders of a partcular bank. The customer pays the bill amount less discount. This discount allowed by them is reimbursed by the bank. The bank has deducted tds on such discount amount reimbursed @ 10.3%.
Issue:
1.Whether it is justified on the part of bank to deduct TDS on such discount reimbured?

2.If it is so, under which section?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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27 May 2010 I THINK BANK IS TREATING THIS AS AN COMMISSION AND DEDUCTING TDS U/S 194H.
JUSTIFICATION DEPENDS ON THE TERMS OF AGREEMENT BETWEEN BANK AND COMPANY.

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