TDS Applicability

Our client is an unrecognized educational organization operating through own centers and Authorized Training centers (ATC) through third parties.

As per the contract (for authorized training centers) “all costs are born by the said centers, the student collections are made in the name of our client, client oblige to reimburses 75% of student collection to concerned centers.”

Invoices are raised in the name of our client however in majority of cases the centers transferred only the remaining share of 25% of total collection to our client.

Now my queries are
1. Is this is a Diversion of income by overriding title? If yes, then whether we have to deduct TDS on such amount (diversion of income by overriding title)? - if reimburse later on and if these does not constitute diversion of income by overriding title then is it possible to make the contract as such without affecting our gross turnover?

2. In case above does not constitute diversion of income then whether TDS should be deducted from above 75% reimbursement as royalty? If yes, then is it possible to deduct the TDS after adjusting the cost of ATC?

Please shed light on above.

Replies (1)

Hello............,

any suggesstion ???????

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