Tds commission

while filing the return, you have show tax deduction for the first payment as "0" and you should select Threshold remarks., and if you pay in march and that payment exceeds the overall limit then you have to deduct 10% on such payment.

Dear Siddu,

It will not be considered as default. You need to deduct TDS only after crossing the basic limit. While filing TDS returns you need to show the transaction against which TDS had been deducted.

Originally posted by : Siddu Reddy
	Dear experts, We paid commission of Rs. 2000 on sales in Feb-15. and  we are not sure whether commission liability arises or not in March depends on sales.  Now my question is  party is not allowing to deduct TDS for Feb since this is under limit and saying deduct TDS when it crosses Rs.5000/- exemption limit in a year.  If commission amount crosses Rs. 5000/- then we will be defaulters for Feb Month. Kindly advise what to be done.

Under the following circumstances TDS u/s 194H is not deductible?

(1)  No deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to the payee, does not exceed Rs. 5,000 (Rs.  2,500 upto 30.06.2010)

(2)  No tax shall be deducted on any commission or brokerage payable by Bharat Sanchar Nigam Ltd. or Mahanagar Telephone Nigam Ltd. to their public call office franchises (Third proviso to section 194H inserted w.e.f. 1-6-2007)

Liability to deduct TDS arise only when amount likely to be paid or credited during the year exceeds the specified limit

Since amount for M/o of Feb is Rs. 2000 only hence it is prudent to expect that total amount of commission for the year would not cross Rs. 5000.

Now if suppose if amount for the m/o goes more than Rs. 3000 then it will not be considered as short deduction for the M/o Feb.

Thanks for  all your replies  . 

but small confusion,  Suppose Commission paid in FEb is  Rs.2000/-  and In march Rs. 4000/- 

How much of TDS to be deducted in March-15.  

is it

1) 400/-   on Rs. 4000 of MArch 

2) 600/-  on Rs. 4000 ofMarch +2000 of Feb

3) 100/- on (6000 less Exemption limit Rs. 5000) i.e Rs. 100

Kindly clear this doubt.

Dear Sidhu

At the time of exceding the limit,  on that day we need to calculate the TDS on total amount paid during the period.

For Example you paid Rs.2000 in the month of Feb ( under the examption limit) and you again paid Rs.4000/- in next month , then your you are liabl to pay tax for the month of March i.e Rs. 600/-

Thank you for clearing the doubt.

No its not., you should deduct 400/- only (being 10% on payment of Rs.4000/-) as I per the examble below

Sno       amount     TDS      Rate     Reason

month1  1000         0            0%      Below threshold exemption(BT exemp)

month2   3000        0             0%      BT exemp(Single and also the aggregate)

month3    500         0             0%      BT exempt(single and also the aggregate)

month4    1000        100        10%     -

100% incorrect