TDS on cash discount

IS CASH DISCOUNT ALLOWED BY A SELLER IS LIABLE FOR TAX DEDUCTION AT SOURCE U/S 194 A

Replies (9)

NO ! Section 194A specifically provides for deduction of tax ONLY in case of Interest other than Interest on Securities. Cash Discount can by no means treated as Interest. Cash Discount is in the nature of incentive provided for prompt payment and is not in the nature of Interest.

Hence no TDS should be deducted from Cash Discount, not only u/s. 194A, but under any other provisions of the any other section of the Income Tax Act.


no                                                                        

NOT TO DEDUCT TDS

cash discount allowed and credited on account of buyer , reduces the payment liability of buyer, here no TDS

 

but 

 

if cash discount is PAID in cash / bank to buyer or anybody else related / unrelated to buyer, then its subject to TDS under head of commission.

No. 194A is for dedcting tax on interest otherthan on securities. Cash discount is not not a interest.

no

Thanks dude

agree with  sandeep sir

there discount is income according to income tax therefore tds deducted under section 194h is treated as income from commission

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