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Tds on online payments - query to experts

Sandeep (in service) (142 Points)

09 April 2013

Dear All,

I've a tricky query regarding how Tax to be deducted on online payments.

Backgroud:

Our co. is into SEO/SEM digital media for our clients. To carry out these services, we need to hire services of google or related Search Engine providers. The biggest problem is that the payment have to made by online by Cr card. So, now the query is how to deduct tax (may be as contractor) while making these payment as it does not allow to put the net figures. OR can we approach Google or other SE provider to their local office in india etc...

If any one has solution, Please reply to this query..

thanks,

Sandeep

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3 Replies

PMA Nooruddin (M.Com, Finance Manager) (422 Points)
Replied 10 April 2013

Dear Sandeep,

These no system as such where you can deduct online and make Payment, what you have to do is deduct the tax at source and keep record of it with you and pay the balance amount,,

make sure you have Tan Registration so that you can deposit the deducted tax into IT and subsequently file returns...

Also get an invoice from your service provider and inform him that you are going to deduct the taxes as per Indian laws

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CMA Devi Vara Prasad Korada (Finance) (654 Points)
Replied 10 April 2013

Nooruddin is right, you have to deduct TDS from them before making payment. It is suggested to get in touch with their local braches for making payments. If it is not possible to deduct TDS or to contact them, it is suggested to use grossing up method to deduct TDS.

CA MANOJ (CA, MBA, B.Com) (141 Points)
Replied 11 April 2013

Google also give invoices just check google's contact address and contact it and discuss the compliance regarding TDS with account department of the same.