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Payment to beauty advisors

Ankit Jain (Student CA Final ) (26 Points)

11 February 2015

Hello sir,

Take an example for better understanding.

D is a distributor paying Beauty Advisor fees, and get it reimbursed from x Ltd.

Case i:- reimbusement does not incude D's income component,

Case II:- reimbusement incude D's income component

the first question is whether D is liable to deduct tds on payment made to beauty advisor u/s 194j and the second one is whether X ltd. is required to deduct TDS on reimbusement of expenses to D in both cases

Thanks and Regards

Ankit Jain

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6 Replies

Puneet Mittal (Sr. Officer Accounts) (196 Points)
Replied 11 February 2015

D is liable to deduct the TDS in both case. But x is liable to deduct the TDS on reimbursement if profit margin or any other charges includes in reimbursement.

monika ahuja (Student CA Final ) (85 Points)
Replied 11 February 2015

First we have to see relation between agent and company whether it is principle to principle relationship or principle to agent.If it is principle to principle relation then D is liable for TDS in both the cases

Ankit Jain (Student CA Final ) (26 Points)
Replied 11 February 2015

bt why D should deduct TDS as expenses is claimed by X ltd. and not by D and if D have to deduct TDS how will he claim Expenses from his Income Originally posted by : Puneet Mittal
	D is liable to deduct the TDS in both case. But x is liable to deduct the TDS on reimbursement if profit margin or any other charges includes in reimbursement.

Ankit Jain (Student CA Final ) (26 Points)
Replied 11 February 2015

actualy D is our Distributor who sales our product at some %age of margin.....n wat about tds liability of X ltd?

Originally posted by : monika ahuja

Puneet Mittal (Sr. Officer Accounts) (196 Points)
Replied 11 February 2015

D will deduct the TDS on payment basis. Than he will realised total amount from X Limited. and x will claimed the expense of that amount.

But if d realised some margin or service charge with the amount of reimbursement than x will also deduct the TDS on the panyment made to D.

J. K. Ratan (Compliance Advisor) (794 Points)
Replied 11 February 2015

Dear Ankit I would suggest a practical application in your case. When "D" makes payment to Beauty Advisor he will deduct TDS on behalf of "X Ltd." The deducted TDS will be deposit on TAN of "X Ltd". And X Ltd. Will considered this amount in their TDS Return. Case:- 2. X Ltd will Paid only the reimbursed amount made by "D" to Beauty Advisor.