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Income tax commission on jio
sir one of the assessments is distributor of jio , turnover of rs.24800000/-, audit case, actual margin given by company is 4%, the disbutor give to 2% te retailers, but company Commissions is showing in 26AS full how to show in profit and loss account, other than sales on Commission is applicable Gst
Replies (1)
| This is a common issue for telecom distributors. Here is the correct treatment: 1. Nature of Transaction: A Jio distributor buys recharge vouchers/plans at a discount and sells them — the 4% margin is not 'commission' in the traditional sense, but the company may report the full sale value in 26AS under Section 194H (commission) or Section 194D, which creates a mismatch. 2. P&L Treatment: - Show turnover as total recharges sold (gross value, i.e., Rs. 2.48 crore) under sales. - Show cost of recharges purchased as 'purchases' — the 4% margin is your gross profit. - The 2% you pass to retailers is your 'commission paid to sub-distributors/retailers' under expenses. - Net margin = 2% of turnover = approximately Rs. 4.96 lakh — this is your actual taxable income (gross profit before other expenses). 3. 26AS Reconciliation: The company may have deducted TDS u/s 194H on the full commission amount, which shows in 26AS. Reconcile this with your actual sales in ITR — the gross turnover in books and 26AS amount should both be disclosed, and difference explained in computation. 4. GST on Commission: Yes, GST (18%) is applicable on services rendered as distributor/agent. If the margin/commission exceeds Rs. 20 lakh annually, GST registration is required and GST must be charged on the commission income. 5. Audit: Turnover exceeding Rs. 1 crore triggers tax audit under Section 44AB — ensure Form 3CD reports the commission income correctly. |
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