Travel agent accounting and Tax audit aspects

This query is : Resolved

Hemant Hatkar (Querist)
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09 July 2010 Dear sir,

please help me for following querries:

1) I have one Non IATA Travel Agent(Say X) he is buying Air tickets from Go-Air or from some other IATA and non IATA agents(Say Y ) the bill consist of detail as under eg.
Ticket Amount Rs.50,000
Less: Handling Chg. Rs. 2,500
Add: Service Tax Rs.5,150
Add: TDS on H.Chg. Rs. 283
---------
Net Due Rs.52,933/-

For This X paid the amount by Ch. To Y Rs.52933/-

Now X issue this ticket to (Say Z ) and charged Rs.55,150/- which he gets from Z by way of Ch.for Rs.55,150/-

Now what will be the accounting entry in books ( Whether this will be sale and purchase of ticket or commission income suggest me ) is there any procedure for travel agents to book entries.

2) what will be the amount of turover for the purpose of TAX Audit,
Commission Amount or Sale Amount

3)Is Travel agent is cover under the Provison of U/s 44AF for for payment of income tax if its turnover is not exceeding for Tax Audit under Income Tax ??

Expecting reply at earliest.

CA.Mini

CA.Mini (Expert)
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09 July 2010 travel agent collects commission for his services. the difference he collects from customers is the commission amount that will be credited as income in the books of the agent.the travel agent pays only rs.52933 to the IATA/airlines.the limit is 4o lakhs for tax audit.TDS is attracted on the commission .this has to be deducted on the commission and subsequently paid either by the payee or payer.hence on the commission rs.2217 deduct the tds @ 10% .and pay to the govt. or pay to the IATA/ airline for paying the tds