In a cinema Theatre business should Tds be deducted on payment given to distributors out of collections considering the fact there is an agreement between the parties to share the collections at certain percentage ..... but sec194C speaks only about contracts made to carry out a work
5 Replies
CA.Saibaburao Nanduri
(Chartered Accountant)
(3847 Points)
Replied 30 September 2007
Section 194 I may be applicable. Pl. go through the section very carefully.
Yashwanth Jain
(Ca )
(82 Points)
Replied 01 October 2007
According to circular no.736 dated 13.12.96 no tax is required to be deducted at source on income shared between the film exibitor and the film distributor, for t5he following reasons:
1. The exhibitor does not let out the cinema hall to the distributor .
2.The distributor does not take cinema building on lease or sub lease or tenancy or under any agreement of similar nature.
3.Generally, the share of the exhibitor is on account of composite services.
Therefore deduction is not required u/s 194 I for the income shared between the film exhibitor and distributor.
Ramakrishna
(Financial Executive)
(438 Points)
Replied 05 October 2008
Section 194C would be applicable.
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