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Quize Winner Gift Accouting and TDS
One of the company has run quize contest for all target achievers (ie who achieved particular level of sale) among many achievers one luck winner is chosen and awarded a car as a gift. Now my question is we need to pay to dealer for purchasing car, but invoice must be raised in the name of winner by dealer so that car can be registered on his name as per RTO rules. How should we account this invoice in our books for booking this transaction from direct tax prospects and will TDS be attracted as this is nothing but promotion of business?
Replies (4)
Quick Summary
Advisable to deduct TDS under 194C as it is in the nature of contract. Report the same value of motor car (on which TCS will be collected) for the purpose of sec 194C in your TDS return. And deposit the TDS thereon. Confirm with the winner about it and get reimbursement of TDS amount.
Invoice shall be in the name of the Winner. PAN and TCS shall be of the winner. Payment will be by the company to the car dealer.
But if invoice is raised on winner name, How can I account it in my Books of accounts? will it not get disallowed for tax purpose?
No. It will not be disallowed. You can take a debit note from the winner for value of car for documentation purpose
Any other better way out?
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