TDS on demat charges

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arti jindal (Querist)
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27 November 2007 whether TDS is applicable on payment made by a pvt ltd company for transaction/demat charges to a depository participant?

if yes, then under which section?

arti jindal

arti jindal (Querist)
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27 November 2007 please answer the query as earliest

R.V.RAO

R.V.RAO (Expert)
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27 November 2007 SECTION 196 SAYS NO TAX IS REQUIRED TO BE DEDUCTED AT SOURCE FROM ANY SUM PAYABLE TO GOVT.,RBI,OR A CORP. ESTABLISHED BY OR UNDER A CENTRAL ACT WHICH UNDER ANY LAW FOR THE TIME BEING INFORCE EXEMPT FROM INCOME TAX ON ITS INCOME ...........OR ANY OTHER INCOME ACCRUING OR ARISING TO IT.
SO NO NEED FOR TDS ON TRANSACTION OR DEMAT CHARGES PAID TO D.P.
R.V.RAO

arti jindal

arti jindal (Querist)
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27 November 2007 sir,
here we ( a stock broker) paid this amount to globe capital limited

arti jindal

arti jindal (Querist)
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27 November 2007 please answer the query as earliest

R.V.RAO

R.V.RAO (Expert)
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27 November 2007 THIS COMES UNDER SEC 194 C AS AGREEMENT BETWEEN YOU (THE STOCK BROKER) AND YOUR D.P.
BUT WHERE IS THE CHANCE FOR YOU TO DEDUCT TDS? BECAUSE AS SOON AS BUY OR SELL ANY SHARES,TRANSACTION CHARGES ARE DEBITED IMMDTLY BY THE D.P TO YOUR ACCOUNT TO WHICH HE HAS ACCESS AND AN AGREEMENT SIGNED BY YOU AUTHORISING FOR SUCH DEBITS.. SO IS THE CASE WITH DEMAT CHARGES. SO IN PRACTICAL CIRCUMSTANCES, YOU DONT GET A CHANCE OR OPPORTUNITY TO MAKE TDS FROM THOSE PAYMENTS.
AS FAR AS THE LAW IS CONCERNED, MY ENQUIRIES WITH MY D.P(UTI BANK-BEGUMPET-HYD) JUST NOW, THEY SAY THEY DID NOT COME ACROSS ANY SUCH INSTANCE WHERE A CUSTOMER DEDUCTED TDS FROM THEIR PAYMENTS.
OBVIOUSLY , THERE OUGHT TO BE AN EXEMPTION AVAILBLE BY INCOME TAX DEPT. FOR SUCH PAYMENTS.
I SHALL GET BACK AGAIN ON ANY FURTHER INFO. ON THIS SUBJECT IF I COULD LAY MY HANDS ON.
TILL SUCH TIME OR TILL YOU ARE SATISFIED, PL. RELEASE PAYMENTS TO D.P WITHOUT TDS ( AT THE SAME TIME KEEPING SOME OUTSTANDING IN D.P's ACCOUNT if you can do that).
BUT NONE OF THE TDS SECTIONS FROM 192 TO 196 SAY ANYTHING ABOUT DEMAT OR TRNSACTION CHARGES PAYABLE TO D.P AS LIABLE TO TDS.
R.V.RAO
R.V.RAO

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