Respected Sir / Madam,
My company is planning to provide some gifts to its dealer & distributors as dipawali offer after they achive the given target.
My question is whether we should deduct the TDS on the same if the gift amount exceed5000/-.
If yes, such deduction shall be made under which section of IT Act.
Kindly Guide me.
Thanking You,
With regards,
Nitil Agarwala
I think you can deduct TDS u/s 194H at 10%.
Let others reply.
no tds is not applicable on the person who gives the gift
but the dealer to whom gift is given would have to record the same in his books of accounts and the same shall be taxable as business income, as there is direct nexus with his profession
Hi Nitil
I think, TDS is not applicable on gift, as gift is not covered under section 192 to 195. But the gift will be taxable in dealer's hand. And the dealer have to pay advance tax or self assessment tax on that gift value.
| Originally posted by : viral sheth | ||
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no tds is not applicable on the person who gives the gift but the dealer to whom gift is given would have to record the same in his books of accounts and the same shall be taxable as business income, as there is direct nexus with his profession |
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NO TDS IS TO BE DEDUCTED...
UNDER WHICH SECTION IT IS TO BE COVER,REALLY NOT....U/S 192 TO ,195
BUT IT WILL BE TAXABLE BUSINESS INCOME OF RECEIVER....
hi
no tds is applicable but the dealer has to book it as income and pay tax
if an employer is providing gift more than value of rs 10000 is taxable....in the hands of employee the employer required to deduct the TDS....in other case the burden still on the dealers head....
I am agree with all of gentlemen who think that TDS on gift will not be applicable.bcz there is no refrence of GIFT in sections 192 to 195 which are related to TDS.
The value of gift will be added to the profit & gains of business bcz it is directly related to business.
it is business promotion expenses (gift in kind). It is not covered under TDS provisions., TDS provisions covers only Winnings such as cross word puzzles, games, horce races etc. which does not anywhere cover gifts. So it is not reqd. from the view pt. of the company to deduct Tds. But the same amount received by an individual should be taken into consideration regarding whether it is taxable under salaries, business or profession or other sources. (which is not so clear in the question)
No tds is ductible by company as this expenditure is just an expense made to promote sale.
CAclubindia
