Sponsorship an expense or donation for a charitable trust

It would be sort of advertisement expense, and as such TDS u/s. 194C & service tax @ 15% would be applicable.

Thankyou for your prompt response.

Hi Amit ,

Certainily its  not a donation ,because the amount is paid to display ur trust name on their hoardings and trophies. So its an application of  money for trust purpose . 

Its an Adverisement  Expense and attracts service tax  ( Since hoardings and trophies are not covered in Print Media) .

TDS is also applicable. But exclude Service tax while calculating TDS.

Thankyou Mr Manoj

Regards

Amit Valia

If 45000 is single payment during the year then TDS will apply , If 45000 is paid cumulatively and each payment not xceeds 30000 ,then no TDS obligation.

Sir,

The Application of Income and Advertisement Expense are two different concepts altogether, since, if it is considered as application of income, It will be covered post statutory deduction and as a payment towards charitable activity, whereas, if we see consider it as an Expense, it will be deducted from the Total Donations received and cannot be considered as Application of income then. Also, if we consider it as an Expense, only then we have a liability to deduct tax at source.

So, now, whether such sponsorship be considered as application of income or as an Expense.

It would be helpful if you clarify the same.

Thankyou