Section 194c

This query is : Resolved

Madhu poddar (Querist)
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13 April 2015 If the Head Office of a company has incurred Advertisement Expenses and subsequently debited that amount in proportionate to its 10 branches and head office has not deduct TDS u/s 194C. Whether branches are liable to deduct TDS u/s 194C?

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
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13 April 2015 The Head Office is the person responsible to deduct TDS. H.O will have to deduct and pay tax to the govt. at the time of receipt of bill or making payment, whichever is earlier.

Here, even if the branches are having separate TANs, they are considered as single person for the purpose of TDS. So, whole of the payments to be aggregated.

If failed to do so, pay interest at the rates specified u/s 201(1)

Madhu poddar

Madhu poddar (Querist)
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13 April 2015 Is there any default by the branches on non-deduct of TDS by the H.O.

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CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
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13 April 2015 Hey. HO and Branches are the same persons. So, they need not deduct any payments on H.O transactions.

If your H.O is outside India, then you need to do TDS u/s 195.

Here, you need not deduct TDS on H.O to BRANCHES.

CA ALOK KUMAR

CA ALOK KUMAR (Expert)
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13 April 2015 As per section 194C, sole responsibility to deduct and deposit tds is on the person who is responsible for paying any sum to any resident contractor or otherwise.
So if H.O has paid entire amount on behalf of branches, HO will be considered responsible person to deduct tds amount.

So far as concerned to default by branches, since branch office is neither having different pan nor branch office is filing its separate ITR, so dis allowance of expenditure shall be applicable for HO and Interest/penalty/fee for non-deduction or non-deposit shall be applicable on HO only.