Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
02 November 2011Our company is dealing in commodity market (Pulses). My query is weather TDS is applicable on commission which we are paying to commodity broker?
Dalwinder Singh
(CA FNL & COMPANY SECREATARY)
(139 Points)
Replied 02 November 2011
TDS provisions are not applicable to commission obtained from trading in securities. Securities include derivatives. Therefore, TDS provisions will not apply to commission received as trading in derivatives. Thus, TDS provisions shall not apply to commodity derivatives.
However, if the transaction results in actual delivery of commodity, then one may argue that commission relates to services in the course of buying or selling goods and is accordingly subject to TDS.
CA Sripal Jain
(Associate Finance)
(709 Points)
Replied 02 November 2011
commission includes any payment received or receivable directly or indirectly by person acting on or behalf of any other person 1. for any services rendered 2.for any service in course of buying and selling of goods 3. in relation to any securities, therefore u/s 194h TDS gets attracted in commodity based transactions (the relavent circular is 619 dt.04/12/1991.)as per this circular TDS needs to be deducted while paying to commodity broker
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