TDS on commission to sub dealer

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anish (Querist)

26 April 2008 XYZ company gives sales commission to its dealears,tax is also duly deducted.My question is if sales order is obtained by the dealer through a third party,and whatever chrges he pays to that party is recovered from the company,will this payment be considered as commission?Is the company responsible for deducting the tax at source?

Sheetal Metha

Sheetal Metha (Expert)

26 April 2008 In this case, dealer pays charges to third party, if he provide any doucment to the co. for the same it should be treated as reimbursement of Exps. and as per provision of IT Act Tax should not be deducted on reimbursement of exps.

If dealer does not provide any document then company should deduct the Tax. (Considering the amount as commssion)

anish

anish (Querist)

26 April 2008 Thanks for the answer,but could you please explain what kind of document the dealer can produce to the company?
If the dealer is raising the bill on the company for the said amount as proffessional charges is this correct ?

Sheetal Metha

Sheetal Metha (Expert)

26 April 2008 Document means any supporting bill/invoive for exps. which dealer has incurred.

If the dealer is raising the bill on the company for the said amount as proffessional charges then coampany should deduct the tax u/s 194J (Porfessional Fees)

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