TDS

This query is : Resolved

Asrar J (Querist)
Follow

26 February 2011 If instead of showing comission, discount is given then is the same (discount)liable for deduction of TDS?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

26 February 2011 Pl go through explanation (i) to section 194H. Seems the name change will not help you for non deduction.

K V Subba Rao

K V Subba Rao (Expert)
Follow

26 February 2011 Please elaborate your query because Commission is paid to Agent and Discount is allowed to Customer

Asrar J

Asrar J (Querist)
Follow

27 February 2011 Sir,actually what i am trying to put across is ,Supposing (in service sector) ,Mr.A gives business to X Ltd. and in consideration for the same X Ltd. wants to give him commission.But, commssion u have to deduct TDS.So,instead of naming it as commission X Ltd gives Mr.A a discount. Is that discount liable for TDS deduction?

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
Follow

27 February 2011 If discount is in the nature of trade discount and can be proved as per normal practice of the trade and documents then it is not liable to TDS.

K V Subba Rao

K V Subba Rao (Expert)
Follow

27 February 2011 As I understand from Query, Mr A is procuring business from Customers. For this purpose, Mr A gets some amount from X Ltd.

In this case, business transactions are between Custormer and X Ltd. Any profit or loss from such transactions will be completely of X Ltd

Mr A gets some amount from X Ltd IRRESPECTIVE of whether busiess transactions beteen Customers and X Ltd results in proit or loss

By whatever name amount paid to Mr A is called, it will be attracted by the TDS provision.

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
Follow

27 February 2011 Mr Subba Rao is correct. If Mr A is different from customers of Mr X than any amount paid to Mr A in any name will be liable for TDS.