Dear All,
one of my client is running contest to boost his business. Gifts like Vouchers, Gold Coins, Mobile etc. is being given to winner. The cost of gifts is exceeding Rs. 10,000. Here my client itself is bearing TDS, over and above the gift amount, client is depositing TDS @ 30% on gift amount.
My concern is whether TDS amount should be 30% of Gift amount or Backward calculation needs to be done. Backward calcuation means since we are bearing TDS amount hence Gift amount should be taken as 70% (after TDS of 30%) and TDS amount should be arrived by dividing the gift amount by 70 and then multiplying with 30.
e.g. if Gift amount is 14,000 then TDS should be Rs. 4,200 (14000 X 30%)...OR... Rs. Rs. 6000 (14000/70 X 30)..
please provide case law or clarificatory note also, if any.
CAclubindia
