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Tds on incentives to dealers

Arpit Rajesh Chudiwale (ARC and Associates) (36 Points)

01 March 2016

Hi, If the assessee had paid an amount by cheque to it's dealer in the form of incentives on sales made by him, whether the payment attracts the provisions of TDS under section 194H of Income Tax Act?

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2 Replies

Keval (Consultant) (120 Points)
Replied 01 March 2016

Hi Arpit,

As per the facts dealer act on the behalf of the person to sale the goods or service and therefore, it will attract TDS provision u/s 194H

Payment made through cheque is not an condition to check the triggring events of section 194H. Also, TDS should be deducted when the expenses are booked or payment is made, whichever is earlier. Kindly that if you have already booked the expenditure of such incentives then TDS should have been paid in subsequent month to the month in which expenditure was booked.

Apart from above if there are any further fact then co-relate that fact with the defination of "Comission and brokerage" in Section 194H which is as under: -

commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;