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Tds liability

344 views 2 replies

mohit pathak

Learner

396 Points Posted on 06 August 2016

HI!

One of our client is a real estate consultant. He offers discount on property bought by his client.

The discount is passed by paying back said amount to the client.

for example :- If the cost of property if Rs 1,00,00,000 and discount offered is 1% which amounts to Rs 1,00,000/- .

our client pays this amount to his client through cheque.

Is he require to deduct TDS on that if no then ok but if the answer is yes then please elaborate the related provision. Thanks

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Replies (2)

suresh

proprietor

425 Points Posted on 06 August 2016

No. The tds provisions will not be applicable in the case of discount allowed to the buyer. Actually the discount or commission paid attracts the provision of TDS u/s 194H. But here in this case there is no principal agent relationship between the buyer and seller. So the provision will not be applicable as held by Honorable Delhi Tribunal in the case of:

Addl. CIT, Sonepat Versus M/s. Crystal Phosphate Ltd. - 2013 (4) TMI 678 - ITAT DELHI - Income Tax

saurabh kumar

Tax Consultant

348 Points Posted on 06 August 2016

Your Client is a consultant and he is passing the discount on behalf of the Real Estate owner/himself there is no need of TDS because neither he is the buyer of property nor he is making any payment on which TDS is required to be deducted.