TDS sec 194 B

This query is : Resolved

Amit Dubey (Querist)
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19 February 2009 Under scratch & win scheme,
We are distributing scratch cards to pasengers of flight. Passenger can get the wining gift after paying Rs 500 irrespective of value of gift,value of gift may more than Rs 500 or less than Rs 500 (for example passenger can win bag, wrist watch camera or hero honda bike)

We are a trading company & have all products in our stock for normal trading except Hero Honda bike

Now query is:
1.Whether we have to deposit TDS U/s 194 B for gifting Hero Honda bike

2. whether we have to deposit TDS on products which cost more than Rs 5000

Please reply

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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19 February 2009 Yes, TDS is applicable. You have to convert to cash value of the gift you are giving in kind and tds has to be paid on the same.

K V Subba Rao

K V Subba Rao (Expert)
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19 February 2009 One of our friends has won a Gift of Car. The Company required my friend (a) to pay to the Company corresponding tax amount and receive Car in kind or (b) receive cash equivalent amount,after deducting TDS.

This happened several years ago.

I think this procedure is right

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