LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Very urgent tds query

manik (ca in practice) (420 Points)

20 June 2012

we are distributors of two wheeler vehicles, we further have sub dealers, we are paying sales incentive to these sub dealers @ fixed rate on sales made by them . my question is whether tds is applicable on this or not? please give reference in support of the answer

Reply
Follow
Share

15 Replies

niharika sureka (Assistant) (75 Points)
Replied 20 June 2012

Incentive is also a kind of commission so tds will be deducted under 194J if payment is above 5000 @ 10%.

SAMEER SUTRADHAR (ARTICLE) (42 Points)
Replied 20 June 2012

commision comes under 194C

(Guest)

Originally posted by : niharika sureka
	Incentive is also a kind of commission so tds will be deducted under 194J if payment is above 5000 @ 10%.

Commission and brokerage comes under section 194H, otherwise answer is true

niharika sureka (Assistant) (75 Points)
Replied 20 June 2012

Sorry for section mistake.. But commission comes under Section 194H..not 194C it is for Contractors

SAMEER SUTRADHAR (ARTICLE) (42 Points)
Replied 20 June 2012

Sorry for section mistake.. same here

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 20 June 2012

Commission and brokerage comes under section 194H @ 10 %.

muthulakshmi (ca student ) (113 Points)
Replied 20 June 2012

incentive is lik commission.. so tds under 194 H..!

Jiral Savla (Senior) (35 Points)
Replied 21 June 2012

Incentive is like commision so TDS will be deducted @ 10% u/s 194-H on amount exceeding Rs.5,000

However NO TDS will be Deducted if such incentive does not exceed Rs.5,000

Further No TDS will be deducted if Deductor is Individual or HUF not covered u/s 44AB

CA Sankalp Patwa (CA) (193 Points)
Replied 21 June 2012

Mr. Manik you will be liable to deduct the TDS @ 10 % on payments to subdealers u/s 194H, if your aggregate payment to the subdealer exceeds Rs. 5000. during the FY.

For reference kindly go through these explanations of section 194 H

194H. Explanation.—For the purposes of this section,—

(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;

(iv) where any income is credited to any account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.’.

1 Like

jaishree (Relationship Manager) (27 Points)
Replied 21 June 2012

It comes in Section 194H Commission or Brokerage on the limit of Rs. 5000/-

Gururaj V Megharaj (IPCC) (70 Points)
Replied 21 June 2012

Incentive-It is not based on fixed rate or %.

Commission-It is based on pre fixed rate.

Hence, when there is a fixed rate, then it attracts TDS.

The above query attracts TDS & it is in the nature of Commission.

M SURESH BABU (ACCOUNTANT) (22 Points)
Replied 21 June 2012

In Construction field what are the deductions made in RA Bill and also explain the rates

Nitil Kr. Agarwala (Persuing CS) (264 Points)
Replied 25 June 2012

Originally posted by : Jiral Savla
	Incentive is like commision so TDS will be deducted @ 10% u/s 194-H on amount exceeding Rs.5,000 However NO TDS will be Deducted if such incentive does not exceed Rs.5,000 Further No TDS will be deducted if Deductor is Individual or HUF not covered u/s 44AB