Tds on gift

since a car is a capital asset,there is no liability on you to deduct tds,

however the receiver will be subjected to payment of gift tax.

The Company may make Gifts to its employess & concerned persons. It is a GIft, No TDS to be deducted by the Company AND  no Income Tax will be paid by the Receiver [ Donee]  as CAR  [ Gift  in kinds ]  does come under the category of PROPERTY u/s 56(2) of the I T Act.

But if the CAR is considered as Commission Paid/Payable,  TDS is required to be deducted u/s 194G of the I t Act and the Cost price of the Car will be added to the total Income of the receipient of Car

CA R K DUMREWALA

9934806832

Car given to agent will not be regarded as comission , hence tds will not be deducted u/s 194h.

The Fair M.V. Of The Car shall be regarded as income from oyher sorces in the hand of receipent.

Dear Mr Anuj,

1.Your case,I feel, squarely falls under the ambit of S 194 H,as follows:

Explanation (i) :

“commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities.

Hence make sure that

• the agent pays the Tax amount as ADVANCE TAX calculated on the amount of payment YOU MADE  or
• Collect the proportionate tax amount (but in this case the tax amount you collect now and the payment you made to the car dealer;aggregate of them will be treated as consideration paid to the agent and the Deptt will levy tax accordingly)

2.S 194 G is not applicable here.

3.Gift of Motor car is also excluded from the ambit of S 56 (2) (vii).Hence no incidence of Taxation in this section.

hi anuj.. their is no tds liability on this occasion

And no tax libality on any side as per gift tax law sec 56 ammended finance act 2010..

thanks all .........but still lot of confusion because of different view by each user

Dear anuj

as per your query, it is clear that you rae paying an extra incentive to agent on compiltation of target by way of car free of cost as a gift. Expenses icurred on a/c of purchase cars is sales promotional exps and to be Dr to Sales promotional Exps than there in no need to dedudct the TDS U/S 194H.

and not taxable in hand of agent

Originally posted by : anuj
	thanks all .........but still lot of confusion because of different view by each user

Try in Experts section..and inform us here if u have a break thru..