16 March 2010
Sir, as per the definition of commission & brokerage in Sec 194H it 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. So on payment of brokerage by client to broker(say Indiabulls) TDS not to be deducted. But when Indiabulls pays commission to its sub broker, is TDS u/s 194H to be deducted?
16 March 2010
In this case, India Bulls is not a client of that sub-broker in any transaction for purchase or sale of security. But the sub-broker is like an agent which promotes the business of the main broker by procuring clients and business for which the commission is paid. Hence, Tax is deductible on such commission u/s 194H.
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