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Should sale commission to tdsed of small firms.

TDS 550 views 1 replies

Venkkatesh

Accountant

124 Points Joined September 2011

Dear CAClub Memebers,

I have a doubt regarding the TDS on Sale Commission. As per 194H Section it must be deduct of 10% on Commission or Brokerage if it exceeds Rs. 5000,/-. That is clear for me but the mentioned amout of Rs. 5,000/- is the Fiscal Year or for each bill.

Indeed, my client is paying 5% Sale Commission to the brokers on invoice. Let me tell you in detail my doubt.

On 24-8-12 Invoiced 50,000/-
On 1-12-12 Invoiced 50,000/-
And finally on 28-2-13 Invoiced 75,000/-

Here my client paid Commssion 2,500/-, 2,500/- and 3,750/- consecutively on invoiced dates itself. Here commission is 8,750/-. So, is this amount must be TDSed. or not as it is being paid of on the dates itself.

Please let me know how to tackle this. The Brokers are not the PAN Holder and not in the position to pay the TDS or Heighter 20%. How to save the Brokers.

Replies (1)

C.A. Sandeep Wawhal

CA PGDFM BCom

1831 Points Joined June 2010

Payment of Tax whether TDS or Otherwise is our obligation. TDS u/s 194H on commission if exceeds Rs. 5000/- is @ 10%. Exceeds Rs. 5000/- means total commission amount throughout the year. Individual bills must be considered in this regards. It means commission paid by you is subject to TDS. If deductee don't have Pan No. TDS rate will be 20% instead of 10%. If invoice is booked as a commission or payment made for the same, there is no any option to save tax. Paid tax as soon as possible. Obligation of payment of TDS is applicable if and only if deductor is under tax audit