Sir, we are selling our products through broker. Some times the debtors are not making full or partial amount to us. That time we are debting the to broker's account and recover from his commission. In this case while debiting the same to brokers account TDS isapplicable or not.
10 Replies
CA Sanjay Bag
(CHARTERED ACCOUNTANT)
(3340 Points)
Replied 14 July 2012
Yes. TDS will be applicable in your case.
CA Amit Jaiswal
(Finance Manager)
(2720 Points)
Replied 14 July 2012
This is just like Bad debt that is adjusted towards brokers commission.
Instead of debiting the party, the assessee is debiting the broker.
Could not understand why TDS is applicable as there is no increase in the amount of commission.
CA Sanjay Bag
(CHARTERED ACCOUNTANT)
(3340 Points)
Replied 14 July 2012
Bad debt? Why it is bad debt. We clearly seen that the entity recovering the amount form their Broker. In true sense they are not facing any loss.
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 14 July 2012
You can paid tds according to this adjustments.
RAHUL MAHAJAN
(CA)
(166 Points)
Replied 16 July 2012
TDS is not applicable.
provisions of sec. 194H could not have been met i.e. it not amount to commission.
It is only recovery of Bad debts.
CA Sanjay Bag
(CHARTERED ACCOUNTANT)
(3340 Points)
Replied 17 July 2012
I my friends are not taken into account the basic concept of Accountancy; that means B owing to me but I recovered my bad debt from X. I think it is better to have expert opinion
Sunil
(Trader)
(2611 Points)
Replied 17 July 2012
TDS is applicable only if you are crediting or paying income to the recepient and not when you are recovering money from anyone even if he receives money from you in form of any income on which TDS is applicable.
You have to deduct TDS only on the commission you credit to the brokers account. From the amount credited after TDS you can make any recovery but that recovery is not subject to TDS.
The Flow:-
Credit Brokers account with commission and recover and deposit TDS as that is his income u/s 194H.
Debit the amount recoverable from broker from whatever balance you have of his. If not sufficient, broker will have to pay to you the shortfall.
CA Sanjay Bag
(CHARTERED ACCOUNTANT)
(3340 Points)
Replied 17 July 2012
So, it is cleared that if you credit your broker Account then you have to deduct TDS, so I still think TDS applicabe in this case.
RAHUL MAHAJAN
(CA)
(166 Points)
Replied 17 July 2012
You have to deduct TDS only on the commission you credit to the brokers account. You can make any recovery from broker but that recovery is not subject to TDS.
ketan
(owner)
(35 Points)
Replied 19 July 2012
Dear Sir,
My Mother have a Agency of Recuriing Deposit (Post Office), so i would like to the information that my mother received the commission & the post office deducte the tds on basis of commission (rules 194h)
So, plz give me the information, how can i tds amount refund
plz suggest me what is the procedure for that
plz reply me as soon as possible.
Thankiny you,
From,
Ketan Surani
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