Tds

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Divya sharma (Querist)
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20 April 2012 ADVERTISEMENT ON FACEBOOK , TDS WILL BE DEDUCTED ??
IF YES HOW??
EVERYTHING IS DONE ONLINE.. PAYMENT IS MADE THROUGH CORPORATE CREDIT CARD.

PRACTICALLY NOT POSSIBLE TO DEDUCT TDS>>
KINDLY CLARIFY

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 U need to remit less amount online and by deducting TDS on such payment. First of all see applicability of TDS since u have not mentioned the amount.

Divya sharma

Divya sharma (Querist)
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20 April 2012 dealing is in crores. are u shure ..
PAYMENT IS BASED ON NUMBER OF CLICKS. INVOICE IS RAISED IN DOLLARS , AND THE SAME IS PAID.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Is it a foreign payment???

Divya sharma

Divya sharma (Querist)
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20 April 2012 facebook ofc is based in ireland
so billing in dollars
and payment by credit card
when card statement comes , amt wih rate is shown and converted in indian rupee.
and the same is entered in books of accounts

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Based on the information given by u and to the extent of my knowledge, it is a foreign payment and u have to deduct TDS. If u have not deducted TDS, then gross it up and u should bear the cost.

Divya sharma

Divya sharma (Querist)
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20 April 2012 it will be a great help
if u explain with example
like if we have made payment of 1250/ than how it will be dealt ??

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Assume that u have paid Rs. 1,250 as to FB. Assuming TDS rate is 10% as per Sec 195 (it depends on country to country and as per DTAA with that country). Then the amount paid by u will be treated as 90%.
If 90% = Rs. 1,250
100% = Rs. 1,250/.9 = 1,388.
Then the entry will be as below.
Advertisment Cost A/c Dr 1,388
To FB A/c 1,250
To TDS Payable A/c 138
I would like to give details of a case law in case of payment made through LC.
Assume that u have taken a LC for foreign payment, then u will pay to the banker and the banker will pay to the Foreign Vendor.
Hence, it is not a foreign payment.
However, in case of a credit card payment, it is as good as u have given a cheque in USD and the banker is just honouring the payment on ur behalf.
Trust this clarifies u.

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