TDS ON SALES PROMOTION

This query is : Resolved

ILESH VINOD PATEL (Querist)
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30 December 2009 Case was as follows
In MLM Company 1 member join & he has to join Another 4 member.
Company collected Rs 3000/-From per member
After Joining 4 member company giving commission in kind Worth Rs 10000/-
In this case company should deduct TDS?

If we consider this commision as Sales promotion expense than What?

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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30 December 2009 In your cases commission is taxable. Please see the below provision u/s 194 H

1. resident person paying commission to his agent .

2.Payment of commission exceeds Rs 2500/- per annum.

If the commission is payable in Kind, then the payer shall make the sufficient provision to make the payment of TDS part to the Government.

The explanation of commission is broad enough to cover the transaction mentioned above.

TDS will attract your transaction.