CA Ramsai N (Fresher) (594 Points)
04 May 2012Hai,,,,,,,,,,,
I need a small clarification regarding TDS on commission..
Issue:
There is Bank, is going to advertise through agent in broadcast media.The bank is paying a lupsum amount of sum 100000/- to the agent. Of which agent will deduct his commission and will pay remaining to the Media.There is no contact between Media and Bank and the bank do not know the rate of commission that the agent deducting.
Quesion:
Now much TDS has to deducted on that payment to Agent.
Thanks in Advance
neeraj
(CA)
(930 Points)
Replied 04 May 2012
I think there must be a contract between bank and the agent so deduct TDS under 194C and book the whole expense as advertisment expense and don't show commission expenses separately.
Murtaza I Bhagat
(Tax & Finance Consultant)
(10523 Points)
Replied 04 May 2012
I think bank should be clear in their transaction with agent & media
first I think if bill is raised by agent then bank no need to know about media
you also want to decide for agent i think if you don't give % on work then it will not consider as commission but it is like contract so its tds rate will be applicable
CA Akshay Kumar Mishra
(Chartered Accountant )
(1784 Points)
Replied 04 May 2012
In the case of CIT v Director, Prasar Bharati 325 ITR 205 it was held that Payment made by Doordarshan to advertisement agencies in the form of discount held as commission.
in ur case bank is not liable to deduct tds u/s 194h on payment of lumpsum amount to advertising agency ...
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 04 May 2012
For advertising contracts, deduct TDS @ 2%
Varuna
(CA Student)
(102 Points)
Replied 04 May 2012
2% TDS should be deducted on advertisement contracts u/s 194C
Ramanuj
(Accountant.)
(834 Points)
Replied 04 May 2012
I think it is contract between bank & agent so that advertisement contracts u/s 194c . TDS deducted should be 2 %.
Shivaram Krishnan
(Partner)
(50 Points)
Replied 04 May 2012
payment for Advertisement is not commission and it comes under Contract u/s 194c and for commission is 194H
Mukesh Babu
(IPCC Student)
(236 Points)
Replied 04 May 2012
Manojit Ghosh
(CA Practice )
(13 Points)
Replied 05 May 2012
PANKAJ AGARWAL
(practising Chartered Accountant)
(136 Points)
Replied 05 May 2012
Shaikh Abdul Shakoor
(Tax Consultant)
(22 Points)
Replied 07 May 2012
I think so bank has to deduct 2% TDS under 194C and balance payment to be released to the agent. If the agent is Company than he has to deducted the TDS and balance amount is to be paid to media and if it is individual / partnership than TDS deduction depend upon the turnover of their business if they are coming under tax audit than they had to deduct the tax and balance is to be released under section 194C.
ANSARI ASRAR
(PROP)
(21 Points)
Replied 12 May 2012
I think there is a contract between bank and agent so it is a contract if it is a contract then TDS will be chrage as per u/s194C which is 2%.
CA. Asrar Ansari
CAclubindia
