Tds u/s 194 c

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Do we need to deduct tds on amount paid to tour and travel agent for doing arrangement of hotel in foreign countries for some of our staff members. He gave a consolidated bill of amount rs 1 lakh. Service charges or commission is not mentioned seprately . Pls reply. Thanks in advance for reply
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In a nutshell, no tds is required to be deducted if the above amount is only for tickets or lodging or both, but does not include commission. Here's how:

Reference is made to circular no. 715 dated 8-8-1995 & 5/2002 date 30/7/2002. If the above payment made for Travel of individual and it includes the amount of Air ticket bill, then the provisions of section 194C do not apply to the payments made to the airlines or the travel agents for purchase of tickets for air travel of individuals. The provisions shall however apply when payments are made for chartering an aircraft for carriage of passengers or goods. This clarification will apply mutatis mutandis to the tickets for travel of individual by any other mode of transport also (Cir No. 715). 

As regards hotel bill, section 194I shall be applicable. the amount paid is below the limit specified in section 194I. Hence TDS provisions shall not apply(Cir No. 5/2002)

If the above amount includes commission as well, and the amount of commission is not specified, then, on a safe side, I may advise you to deduct TDS on full amount u/s 194H @ 10%.

Since I do not have the bill available, I cannot perfectly tell you which remedy you may opt for. I would say you must consult a Chartered Accountant by showing him the actual bill, they he may, as per his professional judgement, advise you further.


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