Query for tds

Dear Amit Kumar,

I am not able understand your question?

Please Clarify,

They are giving the payment to you. since you are the service provider to them.

I don't know to whom you have to make payment and deduct TDS.

Kindly clarify me, so will help you answering this question.

TDS is deducted by the person making payment (payer) i.e  not by the person receiving payment (payee). In your case you seem to b the payee. Hence, you are not liable to deduct tax at source rather home shop 18 has to deduct tax at source while making payment to you.

Home shop 18 is making payment to Mr. Amit Kumar's Company after deducting Shipping Charges & COMMISSION. It amounts to Constructive Payment by Amit Kumar's Company to Home Shop 18. TDS on such Commission is required to be made under section 194H. Refer-Circular No. 619, Dated 04.12.1991.

But how tds will be deducted since commission will retained by Home shop 18.

Is this exception to the rule that tds will be deducted at the time of credit or at the time of payment.Will retaining commission by home shop18 deemed to be payment made by Amit's Co and so tds will be deducted by Amit.v

Please clarify

It would be based on the understanding between Parties. However, kindly note that:- 1. Deduction and deposition of TDS is purely the responsibility of Mr. Amit Kumar's Company. 2. Home Shop 18 will be able to take credit of such TDS. 3. Based on the understanding, amount of TDS may also be remitted by Home Shop 18 to Amit Kumar. OR 4. Amit Kumar's Company may also bear the amount of TDS & deposit TDS by reverse calculations. It is based on the understanding between the party, but in any way, provisions of TDS shall be followed by both the parties.

Thanks to all

For reply but one thing is not cleared yet now that they included shipping charges in their commission invoice so i have to deduct tds rate 2% on shipping separately 10% TDS on commission so have to understand how can calculate both separately

Please give suggestion

Thanks in advance

Amit kumar

 

i give commission on sale to my party which is selling my products as :

i paid rs 50000(by bank) + 50000(by tds payment from my bank)  how i will take entry in my books.

 

Amit Kumar.

Dear Amit,

Suppose, Sale Value = 1000; Commission = 100 and Shipping Charges = 50. I got from ur query that Sales Value of Rs. 1000/- would be collected by Home Shop18 from customer/Shipping Agent. After deducting Commission & Shipping Charges Home Shop18 will pay ur Company Rs. 850/-. But it will also remit you Rs. 11 additionally in respect of TDS, & this amount will be deposited by you in Govt. Account.

1) Entry of Sale

Home Shop18 A/c Dr.      1000

To Sales A/c                                  1000

2) Booking of Expenses

Commission A/c     Dr.      100

Shipping Charges A/c Dr.   50

To TDS on Commission Payable A/c    10

To TDS on Contract Payable A/c              1

To Home Shop18 A/c                                139

3) On receiving Amount from Home Shop18

Bank/Cash A/c        Dr.        861

To Home Shop18 A/c                   861

4) Deposit of TDS to Govt. Account

TDS on Commission Payable A/c    Dr.   10

TDS on Contract Payable A/c             Dr.      1

To  Bank A/c                                                                  11

Mr Amit

I aggred with Mr Vichitra tirvedi but the amount of Commission & shipping charges should be fixed per article or % with an agrrement beetbeen the both parties for the I.tax pupose.

Thank you Vichitra Sir for giving such valuable suggestion as well as thank you to all for helping me

Amit kumar

 

 

Vichitra.. Thanku for valuable input