Suppose a vendor has applied for a Lower deduction certificate mentioning the nature of income as Contractor etc & provided a lower deduction certificate @ 1.5 % .
Whereas actual nature of payment is Commission & Brokerage for which rate was 10 % till FY 2015-2016.
If we deduct TDS @ 1.5 % as per the certificate provided to us even though the nature of payment is different ( i.e. we are paying as Commission Brokerage).
26 May 2016
As per 197 it will be clearly mentioned lower deduction allowed for particular nature of deduction, also eligible amount and period will be also mentioned, same can be verified online by Traces by mentioning approval reference code.
but same can not be adjusted to anyother income which is not specified in 197, For same applicable TDS to be deducted.
27 May 2016
The matter is for the same payment the Nature of expenses as mentioned in the certificate u/s 197 & as pwer agreement with the vendor varies .
We are paying only Commission Only .
But the nature of expenses mentioned in the certificate is : Contractor etc "
And we have deducted TDS as per the certificate at lower rate.
So my query is will we be a defaulter for lower deduction .
( It might a case that the vendor has obtained the Certificate us 197 by Fraud by misrepresenting the nature of Income as contractor service to the AO)
CAclubindia
