TDS RATE

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Hello frnz,


I have a practical problem.

TDS to be deducted on exchange transaction charges for the year Apr'09 to Mar'10.

Now, the problem is at what rate the TDS to be deducted:

1. the rate applicable today i.e. without cess

2. the rate applicable at  31-3-10 i.e. with cess.

 


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Replies (6)

In F. Y. 2009 - 10

TDS on professional Fees - companies - 10.3% if payment does not exceed Rs. 1 crore

& 11.33% if payment exceeds Rs. 1 crore during the year

This is upto 30.09.2009

From 01.10.2010 till date TDS flat rate - 10% (without education cess & surcharge)

Also further i would like to add transaction charges as levied by the Stock Exchanges and it has been decided by the Honourable Mumbai Tribunal in the case of Kotak Securities Ltd. vs. Addl. CIT (2008) 25 SOT 440 (Mum.) that Transaction fees paid to stock exchange can not be said to be a fee paid in consideration of stock exchange rendering any technical services to the assessee. The provisions of section 194J were not attracted, therefore, there was no obligation on the part of the assessee to deduct tax at source consequently, the provisions of section 40(a)(ia) were also not attracted. Hence TDS not deductible.

However the above has been disputed by the department and the appeal in pending before Bombay High Court and hence TDS is being deducted by brokers on a conservative basis.

Agree with Aditya

Ya agree with Mr.Aditya

I have attached the file of Mr. Prakash Somani.

If a foreign exchange dealer raises a cash memo for the sale of foreign currency and in the memo he also charges service charges and service tax on it (service charges) then do we need to deduct TDS on it or not ??


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