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Tds on commission passed on to the customer

anonymous (proprietor) (237 Points)

17 February 2017

Whether TDS is deductible under section 194D or 194H on insurance commission paid by the agent to the customers taking policies from them?

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12 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 17 February 2017

No. Its not commission but gift in nature.

anonymous (proprietor) (237 Points)
Replied 17 February 2017

agreed sir that the true nature is gift, but in the hands of my customer which is a company, the amount received is income and hence taxable, so isin't the agent liable to deduct tds and under which section?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 17 February 2017

Are you allowed to pass on commission to customers?

anonymous (proprietor) (237 Points)
Replied 18 February 2017

Its a normal trade practice.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 18 February 2017

I mean, can you label it as "commission'? If yes, you can deduct.

anonymous (proprietor) (237 Points)
Replied 18 February 2017

Sir, deduct TDS under which section - 194H or 194D?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 18 February 2017

As per me, its neither business commission nor Insurance commission.

saurabh kumar (Tax Consultant) (348 Points)
Replied 18 February 2017

It is illegal to pass on commision to customers as per Sec 41 of Insurance Act.So there is no question of TDS.Futher you can go through the following link for more details

https://theindianlawyer.in/statutesnbareacts/acts/i81.H T M L#_Toc39483135

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anonymous (proprietor) (237 Points)
Replied 20 February 2017

sir the link mentioned by you is not valid. can you please repost the link.

Ritu Raj Singh (Accounts & Tax Executive) (232 Points)
Replied 20 February 2017

milti marketing is abolished by Insurance Act, 2015, Hence passing on of commission is not allowed. Hence no question of TDS.

saurabh kumar (Tax Consultant) (348 Points)
Replied 21 February 2017

Here is another link

https://indiankanoon.org/doc/283507/

Suhin Chaudhry (Accountant) (22 Points)
Replied 23 February 2017

In case the deduction is by or on behalf of the government Tax at source as deducted has to be deposited on the same day.

In other cases, TDS has to be deposited within one week from the end of the month in which such TDS has been deducted from the source of income. If the amount is credited or paid on the last day of the financial year i.e. 31st march then TDS has to be deposited within 2 months from the end of the financial year in which it is credited or paid. I can suggest you that if you visit www.taxassistindia.com then you can get more information.