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tds by branch

abhishek (STUDENT) (162 Points)

29 August 2009

if there is some contract of 1 lac by headoffice for something and it has deducted tds,and branch has the contract with the same person for only 5000rs,then is branch liable to deduct tds?

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6 Replies

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 29 August 2009

Abhishek ....

TDS is dedcuted on the basis on TAN no.........If TAN no. of ur HO & Branch is same then deduct TDS accordingly & if TAN no. of both HO & branch is differ then treat seprate contract.......& dedcut TDS accordingly............

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Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 29 August 2009

Dear Abhishek,

I disagree with Mr. Sorabh.

What I found is following;

Section 194C provides; Any person responsible for paying.

Meaning of “person responsible for paying” is defined under section 204.

204. For the purposes of [the foregoing provisions of this Chapter] and ⁶⁵section 285, the expression “person responsible for paying” means—

(i) in the case of payments of income chargeable under the head “Salaries”, other than payments by the Central Government or the Government of a State, the employer himself or, if the employer is a company, the company itself, including the principal officer thereof;

(ii) in the case of payments of income chargeable under the head “Interest on securities”, other than payments made by or on behalf of the Central Government or the Government of a State, the local authority, corporation or company, including the principal officer thereof;

⁶⁶[(iia) in the case of any sum payable to a non-resident Indian, being any sum representing consideration for the transfer by him of any foreign exchange asset, which is not a short-term capital asset, the authorised dealer responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder;]

(iii) [in the case of credit, or, as the case may be, payment] of any other sum chargeable under the provisions of this Act, the payer himself, or, if the payer is a company, the company itself including the principal officer thereof.

In view of above, the company shall require to deduct tax on Rs. 5000 for Contract which is entered by its branch.

Mr. Sorabh Sir, Correct me if I am wrong or missed something.

Thanks and regards

abhishek (STUDENT) (162 Points)
Replied 31 August 2009

mr. sorabh has represented a clear view but mr. juzer has missed something,kindly revert back, and clear my doubts ,thanks a lot

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 31 August 2009

Dear Abhi.......

Look there are no of example to clear ur doubts.....one is .......say "A" is HO located at Mumbai & "B" is Branch located at Delhi. It is obivious that TAN no. of both office are differ. And Mr. Contractor makes a contract with A & B for Renting the Immovable property. Then both contract will be treat as seprate contract as well on both contract address of both office are mentioned . IF address are seprate then their juridiction is also differ & if juridiction is differ the both contract is mentioned & they must claim minimum exemption seperately. May be Contarct makes contarct with A ony that they will provide office to B also & in that case they got payment from Mumbai Office ie. from "A" . In that case "A" will dedcut TDS accordingly but if there is seperate contact then treat both contarct differ & dedcut TDS accordingly..........Hope now ur doubts has been cleared.

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 31 August 2009

I AGREE WITH MR. SOURABH.

THE BRANCH AND HO ARE DIFFERENT THEREFORE THERE TDS LIABILITY CANT BE CLUBBED.

JUZER YOU SHOULD READ SOME EXPLAINATIONS AS WELL AS PRACTICAL EXAMPLES INSTEAD OF INTERPRETING THE BARE ACT IN YOUR OWN WAY.

REGARDS,

CA RITESH KOTHARI

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Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 01 September 2009

Originally posted by :RITESH KOTHARI
"	I AGREE WITH MR. SOURABH. THE BRANCH AND HO ARE DIFFERENT THEREFORE THERE TDS LIABILITY CANT BE CLUBBED. JUZER YOU SHOULD READ SOME EXPLAINATIONS AS WELL AS PRACTICAL EXAMPLES INSTEAD OF INTERPRETING THE BARE ACT IN YOUR OWN WAY. REGARDS, CA RITESH KOTHARI	"