How to deduct tds under sec.194h

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2013 My employer owns a real estate company where we first develop land and then sell plots. for selling we employ agents and give them commission of rs.8/sq.ft for each plot sale. we also give them some advance for petrol and other exp. which we deduct from their comm. and also we give them spot commission at the time when plot is booked. rs 5 /sq.ft if plot is in inst and rs 7/sq.ft if whole plot is in cash. my que is on what amt tds will be charged. for ex: i sale 2 plots 4842sq.ft+1210.50sq.ft=6052sq.ft i will get a comm of rs 6052sq.ft*8/sq.ft=rs.48420 at the end of the month. I got spot comm.of rs.(4842*5)+(1210.50*7)=24210+8473=32683 and also gets an avance of rs 2000/- for my exp. so on what amt my employer will deduct tds whether it will be:- 1)48420*10% 2)32683*10% 3)48420-32683-2000=13757*10% plz help it urgent.

Hitendra Jain

Hitendra Jain (Expert)
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09 December 2013 Any amount paid as commission or brokerage exceed Rs. 5,000.00 during financial year is liable for TDS.

Sale Commission or Spot Commission i.e. Size of Plot x Rs. 8 or 7 or 5 is merely deciding method of the amount.

Advance for expenses deducted from commission seems to have direct and immediate nexus with commission i.e. If there is no commission then there is no reimbursement of expense because it is deducted from the amount computed which referred to as commission.

Hence your employer will deduct TDS from any amount you received either as advance for expenses, or Sale Commission or Spot Commission.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 December 2013 which s the best method according to u should it be total sales commission or spot comission or total comm.-spot comm.-advances?

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 December 2013 .
AS SOON AS SALES IS EFFECTED BY AN AGENT , THE EMPLOYER SHOULD DEBIT THE COMMISSION A/C AND CREDIT THE AGENT'S A/C BY THE FULL AMOUNT OF COMMISSION PAYABLE TO THE BROKER.
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ASSUMING THAT ADVANCE IS GIVEN IN ADDITION TO THE COMMISSION-
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IN CASE THE ADVANCE IS PAID TO AN AGENT BEFORE COMMISSION BECOMES DUE TO HIM, DEDUCT TDS ON SUCH ADVANCE AT THE TIME OF PAYMENT AS IT IS ALSO A KIND OF INCOME FOR THE AGENT. DEBIT COMMISSION A/C BY 2222/ AND PAY TDS TO THE GOVT OF RS. 222.
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