TDS u/s 194C or u/s 194H

Facts of the case:-

An export promotion council arranges trade fairs outside India...

For this purpose it takes land in foreign countries on rent from a foreign company....

The land is arranged by an Indian Company on the condition that the Council will pay 1% of rent amount to the Indian (mediator) company...

There is a contract between the Council and mediator company that, the company will arrange land in foreign countries for the council as and when required...

Question:- under which section the council will deduct TDS on payment to mediator company? u/s 194C (contractors) or u/s 194H (Commission and Brokerage) ?

Replies (1)

DEAR FAISAL,

 

UNDER SECTION 196H I.E FOR COMMISSION OR BROKERAGE. THE NATURE OF TRANSACTION U SPECIFIED PROVIDES THAT U WILL PAY TO INDIAN COMPANY SUM OF 1% OF THE RENT AMOUNT, THUS TTHE INDIAN COMPANY IS ACTING JUST LIKE AS AN COMMISSION AGENT FOR MAKE AVAILABLE LAND ON RENT OUTSIDE INDIA. THUS LIABLE TO DEDUCT THE TDS @ 10% UNDER 194H.

 

REGARDS,

 

MANOJ

 

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