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Tds.....tds......?????

Arif Mohammed Khan (KNOWLEDGE SEEKER) (146 Points)

26 November 2012

Whether TDS to be deducted on Payment to Advertising Agent (and not to the Advertising Company)???

The Advertising agent told us not to deduct TDS(when we pay them) coz,when the agent pays to Advertising company the agent deduct TDS and remaining is Paid...............Is this correct ??? Who need to deduct TDS...???

Quote relevent section>>>Please clarify immediatly

thanking u

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13 Replies

(Guest)

For this you should know the diffrence between the Advt. agent and the advertiser. Suppose you are giving an ad to the newspaper directly then you should not.

But when you giving the ad to a newspaper through some agent then TDS applies.

Ref. Sec 194H Explanation (i) Commission or brokerage includes any payment received or receivable , directly or indirectly by a person acting on behalf of another for services rendered (not being professional services)or for any services in the course of....

Hemant Kumar (Accounts Manager MBA (Fin) CMA*) (6450 Points)
Replied 26 November 2012

Deduct the tds on bill from whom you have to get.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 November 2012

A advertiser

B Agent

C advertising company

A will deduct on the amount paid to B

B will deduct on the amount paid to C

no relaxation

1 Like

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3340 Points)
Replied 27 November 2012

Originally posted by : Hemant Kumar....
	Deduct the tds on bill from whom you have to get.

TOTALLY AGREED

CA P.Vasudeva Rao (B.Com, ACA) (88 Points)
Replied 27 November 2012

Originally posted by : Hemant Kumar....
	Deduct the tds on bill from whom you have to get.

Sir, I have a doubt. For example in the above case say total bill from the agent Rs.5000/- includes Rs.500/- as commission and Rs.4500/- as charges for advertising. How can we deduct TDS? Whether u/s 194C or 194H?

What if we don't know how much commission included in the bill? Have we to deduct tax u/s 194C or 194H?

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 27 November 2012

@ Vasudev Rao,Sec 194C says that deduct TDS on amount paid .

So when you r payinng to an advertising agency ,TDS should be deducted on total bill which includes amount payable to media and agency commission.

194H doesnt apply to advertising agency commission.

1 Like

(Guest)

194H does not apply....!!! ...? Sec. applies. Please Clarify.

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 27 November 2012

@ Rambabu ,when a client makes a payment either to advertising agency or advertiser sec 194C applies not 194H

(Guest)

agreed.

Hemant Kumar (Accounts Manager MBA (Fin) CMA*) (6450 Points)
Replied 28 November 2012

Originally posted by : CA P.Vasudeva Rao
	Originally posted by : Hemant Kumar.... Deduct the tds on bill from whom you have to get. Sir, I have a doubt. For example in the above case say total bill from the agent Rs.5000/- includes Rs.500/- as commission and Rs.4500/- as charges for advertising. How can we deduct TDS? Whether u/s 194C or 194H? What if we don't know how much commission included in the bill? Have we to deduct tax u/s 194C or 194H?

Vasudeva rao ji.. whatever condition you told above, in this Advertising company raise bill on advertising charges to Agent then agent have to must deduct the tds on bill Say 4500/- Deduct tds u/s. 194C. Same like this agent bill raise to customer hence, we should must to deduct tds on the total bill.. say 5000/- Deduct TDS u/s. 194C. not 194H. As far as unknowing commision concern that we dont need to know how much commision will get to agent, because we dont have to deduct tds under section 194H. Because total case is in under section 194C.

(Guest)

deeply regret to note that the qualified professionals while answering are making contradictory .......comments.

In the above case every professional said the TDS has to be deducted under Sec 194C but not 194H. It's o.K. But in the examples given the TDS it is indicated the TDS has to be deducted @ 10%. When the applicable section is 194C TDS can only be 2% / 1%.

When you comment if you do not refer to sec. it conveys the applicable sec. is..........

Thank you.