My Friend is into Pharma Industry Sales & Marketing & gaining commission on sales & without any salary income. To the Doctors who will prescribe their products will give reward by way of trip to Dubai/ Bangkok/ Srilanka.in the month of Dec'12 & Jan'13. For safe side If my Friend ask the investor to give him the package amount of Trip on monthly basis by cheque as per the business performance. Then can my Friend return the same cheque amt to his investor, during that period for spending the amount for sponsoring the desired foreign trip to the Doctors . Should my Friend be charged any Tax liability for the amount taken and keeping it for some period?
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Tax liability
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Its not clear
Your query is not clear.
However, I presume that you are to pay for the foreign trips of doctors who prescribe the medicines you are marketing. You want to take that amount on a monthly basis from your manufacturer and then return it to be spent on doctors' trip. I wonder why you should resort to this confusing and circuituous route. Just ask the manufacturer to pay the doctors directly. If you take the money as your commission, then you have to pay tax on it. Your returning the money will not have any impact on your tax liability.
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