TDS querry

This query is : Resolved

Yogesh Modi (Querist)
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03 October 2008 We are receiving the Bills from Vendor (Automobile Dealers) for the expense mentioned below:

As you are aware that Banks provides Vehicle Financing. So one of the Bank is financing vehicles purchased through various Automobile dealers all over India. To promote the sales the dealers are providing various promotional schemes to customers.One of such promotional activity is providing free Insurance to the customers. The dealers then claims the share of Bank (say 50% or 100%) as reimbursement through Invoice raised on Bank.

The supporting provided with the Invoice is in the form of the acknowledgment from customers that they have received the Free Insurance. The supporting is sometimes marked to the concerned Vendor & sometimes to the Bank.

Please advice whether TDS need to be deducted in such a case or not.

PIYUSH JAIN

PIYUSH JAIN (Expert)
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03 October 2008 TDS amount is deductable on Insurance commission u/s 194D, as there is no TDS applicable on Insurace premium dealer will not deduct TDS from that amount,weather payment is on his own bahalf or Banks Behalf. In case of dealers claim TDS is not deductable as it is not his income and such payment is not covered under TDS provisions.