Inter company transaction.

Holding-subsidiary sales:

• Sales between a holding company and its subsidiary are related party transactions: Sec 188 (board approval, plus members' approval above thresholds unless arm's length and in the ordinary course). Disclose in the financial statements (AS 18 / Ind AS 24) and AOC-2.

• In consolidated financial statements, inter-company sales and unrealised profits are eliminated.

• GST: related persons, so value under Rule 28 (OMV, or invoice value deemed OMV if the recipient gets full ITC).

• Income-tax: Sec 40A(2) for excessive payments. Domestic TP (SDT) only if one party claims profit-linked deductions and transactions exceed Rs 20 crore.

A sale by a holding company to its subsidiary does not, by itself, attract TDS. TDS depends on the nature of the payment and whether a specific provision applies—not merely on the relationship between the companies. For example, purchases of goods may attract section 194Q if its conditions are met; payments for contractual work or professional services may fall under sections 194C or 194J, respectively. Any applicable threshold and other conditions must be checked for the relevant financial year.

If the transaction is an ordinary sale of goods, please confirm which company is the buyer, the turnover and purchase values, and whether the payment includes any service or other component. These details determine whether a specific TDS provision applies.

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