section 194H

Section 194H TDS on Commission and Brokerage with Case Laws

Income Tax - Section 194H is for income tax deducted on any income by way of commission or brokerage, by any person responsible for paying to a resident. (Section 194H does not include insurance commission referred to in section 194D.) Individuals/HUFs who were covered under section 44AB(a) and (b) in the preceding previous year i.e. whose gross turno...

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TDS Rate Chart for Financial Year 2020-21

Income Tax - Simple TDS Rate Chart for Financial Year 2020-21 –  Applicable from 14th May 2020 Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at […]...

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TDS on Rent & Brokerage on immovable Properties

Income Tax - A critical analysis on the provisions of Tax Deductions at sources with respect to rental income & brokerage /commission income on immovable Properties (Updated as per Finance Act , 2020) In order to enhance the effectiveness of the discussion, I would like to present it in Frequently asked questions and answers Mode – 1) Normal...

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TDS Rate Chart for FY 2020-21 / AY 2021-22 – Updated

Income Tax - TDS Rate Chart For Assessment year 2021-22 /Financial Year 2020-21 As we all are aware that yesterday our Honourable Finance Minister has conducted press release. In that press release she declared that The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the […]...

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Section 194H: TDS on Commission and Brokerage – FAQs

Income Tax - Any person, (other than individual or a Hindu undivided family) who is responsible for paying, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, deduct income-tax thereon....

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TDS not deductible on Trade Offers Provided to Distributors

Nokia India Pvt. Ltd Vs Acit (ITAT Delhi) - Assessee made the detailed submissions inter alia contending that the provision of section 194H, 194C, 194J were not applicable to the case because the payment was not for any contractor of services or work, there was no relationship of agency....

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Section 194H TDS not applicable on Payment gateway charges paid to banks/credit card agencies

ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad) - ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad) Assessee hosts online games and when the customers make payments through banking Gateways by way of credit or debit card of the relevant banks ( which are referred to as Gateways) and while transferring money to the assessee’s account, banks ...

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No disallowance of discount for Non-Deduction of TDS

Dish Tv India Limited Vs. ACIT (ITAT Mumbai) - Whether disallowing expenditure in the nature of discount under section 40(a)(ia) for non-deduction of tax u/s 194J by considering it as commission is justified in law?...

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Payment of Foreign Agency Commission not liable for TDS in India

M/s. Divya Creations Vs ACIT (ITAT Delhi) - The issue under consideration is whether the TDS will be applicable on payment of Foreign Agency Commission?...

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No TDS on Payment Gateway Charges paid by Make My Trip

MakeMy Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi) - The issue under consideration is whether the Payment Gateway facilities provided by banks are liable for TDS provisions?...

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TDS on payments for procuring or canvassing for advertisements

Circular No. 05/2016- Income Tax - (29/02/2016) - Law Related to Tax Deduction at Source (TDS) on payments by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements....

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Recent Posts in "section 194H"

Section 194H TDS on Commission and Brokerage with Case Laws

Section 194H is for income tax deducted on any income by way of commission or brokerage, by any person responsible for paying to a resident. (Section 194H does not include insurance commission referred to in section 194D.) Individuals/HUFs who were covered under section 44AB(a) and (b) in the preceding previous year i.e. whose gross turno...

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Posted Under: Income Tax |

TDS not deductible on Trade Offers Provided to Distributors

Nokia India Pvt. Ltd Vs Acit (ITAT Delhi)

Assessee made the detailed submissions inter alia contending that the provision of section 194H, 194C, 194J were not applicable to the case because the payment was not for any contractor of services or work, there was no relationship of agency....

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Section 194H TDS not applicable on Payment gateway charges paid to banks/credit card agencies

ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad)

ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad) Assessee hosts online games and when the customers make payments through banking Gateways by way of credit or debit card of the relevant banks ( which are referred to as Gateways) and while transferring money to the assessee’s account, banks invariably retain service charges. It is...

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No disallowance of discount for Non-Deduction of TDS

Dish Tv India Limited Vs. ACIT (ITAT Mumbai)

Whether disallowing expenditure in the nature of discount under section 40(a)(ia) for non-deduction of tax u/s 194J by considering it as commission is justified in law?...

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Payment of Foreign Agency Commission not liable for TDS in India

M/s. Divya Creations Vs ACIT (ITAT Delhi)

The issue under consideration is whether the TDS will be applicable on payment of Foreign Agency Commission?...

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No TDS on Payment Gateway Charges paid by Make My Trip

MakeMy Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)

The issue under consideration is whether the Payment Gateway facilities provided by banks are liable for TDS provisions?...

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Section 194H TDS not applies on Bank Guarantee Commission

M/s. Navnirman Highway Project Pvt. Ltd. Vs DCIT (ITAT Delhi)

The issue under consideration is whether TDS under section 194H is applicable from payment of bank guarantee commission to the bank?...

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No TDS u/s 194H for Prepaid SIM & 194J for Roaming Charges

Vodafone Idea Limited Vs ACIT-TDS (ITAT Cuttack)

AO considered assessee as assessee in default in respect of non-deduction of TDS under Section 194H and 194J of the Act on payment of commission and fees for professional or technical services and passed an order under Section 201(1) & 201(1A) of the Act....

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No Section 194H TDS on discounts on prepaid SIM Cards or Talktime 

ACIT Vs Vodafone South Ltd (ITAT Chennai)

The issue under consideration is whether TDS u/s 194H is applicable on discounts allowed for prepaid SIM Cards/ Talktime as distributor margin?...

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TDS Rate Chart for Financial Year 2020-21

Simple TDS Rate Chart for Financial Year 2020-21 –  Applicable from 14th May 2020 Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at […]...

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Posted Under: Income Tax |

TDS on Rent & Brokerage on immovable Properties

A critical analysis on the provisions of Tax Deductions at sources with respect to rental income & brokerage /commission income on immovable Properties (Updated as per Finance Act , 2020) In order to enhance the effectiveness of the discussion, I would like to present it in Frequently asked questions and answers Mode – 1) Normal...

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Posted Under: Income Tax |

TDS Rate Chart for FY 2020-21 / AY 2021-22 – Updated

TDS Rate Chart For Assessment year 2021-22 /Financial Year 2020-21 As we all are aware that yesterday our Honourable Finance Minister has conducted press release. In that press release she declared that The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the […]...

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Section 194H: TDS on Commission and Brokerage – FAQs

Any person, (other than individual or a Hindu undivided family) who is responsible for paying, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, deduct income-tax thereon....

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TDS Provisions related to Small Businesses & Covid 19 Relief

TAX DEDUCTION AT SOURCE (TDS) In order to ensure better tax compliance and ensuring the timely payment of tax to the Government treasury, a mechanism has been established by making it mandatory for certain persons responsible for making payment of some expenses to deduct tax from such payment and deposit it to the Government account. [&he...

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No Section 194H TDS on discount to distributors of prepaid SIM cards

CIT (TDS) Vs Vodafone Cellular Ltd. (Bombay High Court)

CIT (TDS) Vs Vodafone Cellular Ltd. (Bombay High Court) Whether provisions of Section 194H of the Income Tax Act, 1961 will be applicable in case of discounts given by the assessee to the distributors on account of prepaid SIM cards. Section 194H of the Act deals with commission or brokerage. It says that any person, […]...

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TDS: Some Practical and Procedural Issues

Tax deduction at source is considered as a major tool to curb tax evasion and Governments have, wherever possible, introduced TDS provisions in tax laws both in direct taxation and indirect taxation. In this article the author is trying to throw light on some practical and procedural issues in Income Tax – TDS....

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Posted Under: Income Tax |

TDS Rates for Financial Year 2020-21 & Assessment Year 2021-22

Article compiles TDS Rate Chart For Financial Year 2020-21 and Assessment Year 2021-22 along with Due date of Payment of TDS and mode of Payment of TDS. Article explains Section under which TDS is deductible and TDS Rate Applicable. Article Covers Change in TDS Applicable from 01.04.2020 which was proposed by Union BUdget 2020 which [&hel...

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No Disallowance for non deduction of TDS u/s 194H /194J in absence of principal-agent relationship & technical services

Nokia India Pvt. Ltd. Vs DCIT (ITAT Delhi)

Disallowance under Section 40(a)(ia) for non deduction of TDS u/s 194H and 194J on account of trade offers amounting to INR 834,92,63,976 provided by assessee to its distributors (HCL Info systems Ltd as well as other distributors) was not justified as there was absence of a principal-agent relationship thus, benefit extended to distribut...

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Fees for rendering banking services cannot be treated as commission for TDS U/s. 194H

CIT Vs Cleartrip Pvt. Ltd. (Bombay High Court)

The amount retained by the bank for the fees charged for having rendered banking services, cannot be treated as a commission or a brokerage paid in course of use of banking service by a person acting on behalf of another for buying or selling goods, so as to be hit by section 194H....

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No TDS on Payment to bank for Credit Card transaction processing

CIT (TDS)-1 Vs Jet Airways (India) Ltd. (Bombay High Court)

The so-called bank guarantee commission was not in the nature of commission paid to an agent but it was in the nature of bank charges for providing one of the banking services. The requirement of section 194H of the Act, therefore, would not arise....

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Private healthcare sector: Income tax incentives, Provisions & Judgments

Private healthcare sector: Income tax incentives, Legal Provisions and Judgments This article covers various sections related to healthcare sector such as Section 10(23C), Section 44A, Section 44AB, Section 11, Section 12, Section 35AD, Section 194I, Section 194h, Section J and many more along with various related case laws. Legal Provisi...

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Posted Under: Income Tax |

TDS Rates | A.Y 2020-21 | Salary, Rent, Brokerage, Contract, Professional Fees

In this article, we look at transactions that require TDS deduction and the TDS rates for AY 2020-21. In some transaction, the person making payment is required to deduct tax at source (TDS) while making payment....

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In absence of principal agent relationship TDS not deductible on bank guarantee commission 

NKC Projects (P) Ltd. Vs DCIT (ITAT Delhi)

NKC Projects (P) Ltd. Vs DCIT (ITAT Delhi) It could be seen from the assessment order that while dealing with the issue of allowability of the bank guarantee commission, learned Assessing Officer held that on identical facts in assessee’s own case for the assessment year 2011-12 an addition under section 40(a)(ia) of the Act was [&helli...

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TDS not dedutible on charges paid to Banks for providing payment gateway

PCIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court)

Services provided by the payment gateway is such that the charges collected by it has to be necessarily treated as fees and not as a commission. The payment in fact is made by one principal to another and it is only being facilitated by the payment gateway by providing a service....

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TDS Rate Chart for AY 2020-21/FY 2019-20

TDS Rate Chart or TDS Rate Table For Assessment year 2020-21 (AY) / Financial Year (FY) 2019-20 In the case of a person other than a company (Resident and Non-Resident) i.e. Individual, HUF, BOI, AOP, Artificial Judicial Persons. Partnership Firm (Including LLP) and for domestic company and Foreign Companies. TDS Rates are after consideri...

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Posted Under: Income Tax |

Discount under product distribution scheme to buy assessee’s product is not a commission for TDS U/s. 194H

CIT Vs Intervet India Pvt.Ltd. (Bombay High Court)

CIT Vs Intervet India Pvt.Ltd. (Bombay High Court)  The Assessee had undertaken sales promotional scheme viz. Product discount scheme and Product campaign as discussed herein above under which the Assessee had offered an incentive on case to case basis to its stockists/dealers/agents. An amount of Rs.70,67,089/- was claimed as a deductio...

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Commission or brokerage [Section 194H]

Any person who is responsible for paying any income by way of commission (other than insurance commission) or brokerage to a resident shall deduct income tax at the rate of 5% under Section 194H of Income Tax Act, 1961. However, an individual or HUF whose total sales, gross receipts or turnover from the business or […]...

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Section 194H – TDS on Commission or Brokerage

The provisions of section 194H of the Income Tax Act, 1961 governs the TDS deductible on commission or brokerage income. The present article briefs the basic provisions of section 194H of the Income Tax Act; explains the meaning of commission / brokerage; provides TDS deduction rate and time of deduction of TDS and also provides the [&he...

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No TDS u/s 194H on commission paid to banks on processing of credit card transactions

Pr. CIT Vs Hotel Leela Venture Ltd. (Bombay High Court)

Bank guarantee commission was not in the nature of commission paid to an agent but it was in the nature of bank charges for providing one of the banking service, therefore, the charge collected by bank for such service did not amount to commission within the meaning of section 194H and such commission could not be disallowed under section...

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Commission to Sahayak for collecting milk liable for TDS u/s 194C

DCIT Vs M/s. Maahi Milk Producer Co. Ltd. (ITAT Rajkot)

Commission payments made by assessee to Sahayak was on percentage basis depending on various parameters like number of farmers pouring milk, fat and SNF factor in milk, quantity of milk collected etc. which ensured payment was commensurate with work performed and thus, the nature of work carried out by the Sahayak were covered by provisio...

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No TDS u/s 194H on bank charges for credit card payments

Airport Retail P. Ltd. Vs DCIT (ITAT Mumbai)

Airport Retail P. Ltd. Vs DCIT (ITAT Mumbai) Conclusion: Payments towards bank charges for credit card payments were not liable for TDS under section 194H as the same was not a commission. Held:  Assessee had made payments towards bank charges for credit card payments . AO made the additions as assessee made payment  without deduction [...

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TDS u/s.194H not deductible on credit card commission retained by banks

ACIT Vs The Indian Hotels Company Ltd. (ITAT Delhi)

ACIT Vs Indian Hotels Company Ltd. (ITAT Delhi) It was the submission of the assessee that credit card commission was out of the realm of section 194H of the Act since there was no principal-agent relationship between the merchant establishment and the bank and, therefore, the provisions relating to tax deduction at source were not [&hell...

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TDS not deductible on Payment Gateway Charges paid to Banks

Pr. CIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court)

Pr. CIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court) Central Government, by notification dated 31stDecember, 2012 has notified that no TDS shall be made on the following payments to the banks listed in the Second Schedule to the Reserve Bank of India Act: (i) bank guarantee commission; (ii) cash management service charges; […...

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TDS Rate Chart for the FY-2019-2020

TDS Rate Chart for the Financial Year (FY) -2019-2020 / TDS Rate Chart for the Assessment Year (AY) -2020-2021. Article Prescribes Nature of Payment on which TDS is deductible, Section under which TDS is deductible, Basic amount per annum on which TDS is not deductible, TDS rate if PAN is not deductible. TDS rates are […]...

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Posted Under: Income Tax |

TDS u/s 194H not deductible on discount to prepaid card distributors for SIM card supply

Ms Idea Cellular Ltd Vs ACIT (ITAT Delhi)

Section 194 H was applicable on on the discount allowed by assessee to the prepaid card distributors in respect of supply of SIM card/Recharge vouchers (SIM/RV)....

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Bank guarantee commission not liable to TDS u/s 194H

DCIT Vs Jaypee Sports International Ltd. (ITAT Delhi)

TDS u/s 194H was not applicable to bank guarantee commission as the same did not fall into clause (i) of Explanation to section 194H and exemption was provided under section 194A(2)(iiia) in respect of any payment made to any banking company to which any Banking Regulation applies. ...

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TDS on payment to retailers on Sale of SIM & Mobile Recharge Coupons

Shri Rahul Singhal Vs ITO (ITAT Jaipur)

Shri Rahul Singhal Vs ITO (ITAT Jaipur) This appeal by the assessee is directed against the order dated 02/07/2018 of ld. CIT (A)-3, Jaipur for the A.Y. 2014-14. The assessee has raised following grounds of appeal: “1. The impugned additions and disallowances made in the order U/s 143(3) of the Act dated 29/12/2016 are bad […]...

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TDS Not deductible on Passenger Service Fees Collected by Airlines

ACIT Vs Spice Jet Ltd. (ITAT Delhi)

SF cannot be considered to be a payment made by the assessee airline. PSF is a payment made by the passenger which is only routed through the assessee airline. It is undisputed that the amount handed over by the assessee airline to the Airport Operators has also not been claimed as expenditure by the asssesee in its books of account....

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No Liability to Deduct TDS U/S 194H on Credit Card Charges And Conversion Charges of Foreign Currency Paid to Bank

Airport Retail P. Ltd. Vs DCIT (ITAT Mumbai)

Hon’ble ITAT Mumbai in recent case of Airport Retail P. Ltd. vs. DCIT ITA No. 4816/Mum/2015 date of decision 09.01.2019 has decided that TDS u/s 194H is not application on bank charges paid for credit card payments and conversion charges of foreign exchange into cash. Hon’ble tribunal has examined the nature of transaction has conclud...

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TDS not deductible on issue of recharge vouchers by cellular service provider at discount

Idea Cellular Ltd. Vs ACIT (ITAT Kolkata)

No commission element was embedded in sale of prepaid SIM cards/ prepaid vouchers/ recharge coupons and, therefore, assessee was not liable to deduct tax under section 194H....

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S. 194H TDS- Incentive paid by dealers to sub-dealers cannot be equated with commission

Rakesh Kumar Vs CIT (ITAT Delhi)

Rakesh Kumar Vs CIT (ITAT Delhi) The permissive right to use the SIM cards to get access to the phone network of the telecom companies is given only to the ultimate customers who have activated the connections. Thus, in the case of the telecom company, it is the owner of the prepaid voucher/SIM card and […]...

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Section 263 Inadequate inquiry by AO, cannot be considered as lack of inquiry

Fusion Voice Solutions India (P) Ltd. Vs ITO (ITAT Visakhapatnam)

Inadequate inquiry by AO with respect to compliance of TDS under section 194H could not be equated with lack of inquiry, so as take the case for revision under section 263....

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TDS U/s. 194H applicable on Discount on prepaid products offered to distributors by telecom service provider

Tata Teleservices Ltd. Vs ITO (ITAT Delhi)

Discount on prepaid products offered to distributors by assessee engaged in telecom services was in the nature of commission which did attract of section 194H....

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TDS not deductible on incentives in the nature of Discount

DCIT Vs M/s. Creative Technotex (P.) Ltd. (ITAT Kolkata)

DCIT Vs M/s. Creative Technotex (P.) Ltd. (ITAT Kolkata) Assessee contended that during the year commission was paid to the parties and incentive was also paid to several persons, who physically collect the money from different places as per the direction of the team employed. According to the assessee, this is not commission but incentiv...

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No TDS required to be deducted U/s 194H on bank guarantee commission

DCIT Vs PRL Projects & Infrastructure Lt. (ITAT Delhi)

ITAT had held that there is no principal-agent relationship between the bank issuing the bank guaranee of the assessee. The ITAT Mumbai Bench had further noted that while it is termed as |guarantee commission|, the same is not in the nature of commission...

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Don’t Take TDS Lightly

Nowadays delay in payment of TDS and in TDS return Filing makes an assessee liable to Late Payment Interest, Late Payment Penalty, Late Filing Fees, Late Filing Penalty and Further makes him liable to prosecution under the provision of the Income Tax Act, 1961....

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Posted Under: Income Tax |

No TDS U/s. 194H on discount on sale of prepaid starter kits/sim cards to distributors

DCIT Vs M/s Tata Tele Services (Mah) (ITAT Mumbai)

As the sale of starter kits/sim cards is purely a purchase/sale transaction on principal-to-principal basis and there is no relationship of agency, hence no obligation was cast upon the assessee to have deducted tax at source under Sec. 194H in respect of the discounts given to the distributors on the sale of the same....

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No TDS U/s. 194H on Commission by sub-broker on Security Transactions

ACIT Vs Rajesh Falor (ITAT Kolkata)

This appeal by the Revenue arises out of the order of the Learned Commissioner of Income Tax(Appeals)-Durgapur [in short the ld CIT(A)] in Appeal No. 08/CIT(A)/DGP/2015-16 dated 31.08.2016 against the order passed by the DCIT, Circle-1, Dgp [ in short the ld AO] under section 143(3) of the Income Tax Act...

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Dealer need not deduct TDS on Commission directly paid by Mobile Operator to Retailers

Shri Virendra Kumar Jain Vs The Income Tax Officer (ITAT Jaipur)

The assessee is an Individual and engaged in the business of trading in mobile and accessories including SIM card, pre-paid card etc. During the course of assessment proceedings, the AO noted that the assessee has shown the payment of commission of Rs. 16,41,989/- under section 40(a)(ia) of the Act without deduction of TDS...

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TDS deductible on Commission retained by Airline Operators for Collecting Passenger Service Fee

M/s. Delhi International Airport Pvt. Ltd Vs. DCIT (ITAT Bangalore)

M/s. Delhi International Tax Airport Pvt. Ltd Vs DCIT (ITAT Bangalore) Once it has been repeatedly held that Airlines Operators are collecting the PSF on behalf of the Airport Authorities/Operators and the PSF is to be paid to the airport authority in terms of the notifications issued by the MOCA at different points of time,the […]...

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TDS not deductible on Sim Card & recharge coupon discount

ITO Vs Tarun Sales (ITAT Delhi)

ITO Vs Tarun Sales (ITAT Delhi) ITAT held that Since no dealer or sub-dealer was appointed either by BSNL or by the assessee, for the purpose of marketing the products and/or service of the BSNL, the entire sales were to customers, either directly or through shopkeepers, who rendered services to the customers. The entire sales […]...

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TDS u/s 194H not deductible on Cash Discounts to Customers for Bulk purchase of Goods

EPCOS India Pvt. Ltd. Vs. ITO (ITAT Kolkata)

EPCOS India Pvt. Ltd. Vs. ITO (ITAT Kolkata) Briefly stated facts are that the assessee in the present case is a private limited company and engaged in the business of manufacturing and sale of soft ferrite components, DC and AC capacitors, metalized films etc. The assessee in the year under consideration has claimed expenses under [&hell...

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Non-compliance of Section 194H by assessee attracts rigor of Section 201

The Director, Prasar Bharati Vs. CIT (Supreme Court Of India)

The Director, Prasar Bharati Vs. CIT (Supreme Court Of India) In our considered view, the High Court was right in holding that the provisions of Section 194H are applicable to the appellant because the payments made by the appellant pursuant to the agreement in question were in the nature of payment made by way of […]...

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TDS not deductible on Roaming Charges & Discounts to Distributors

The Dy. CIT Vs M/s. Vodafone West Ltd. (ITAT Ahmedabad)

Roaming services are provided by telecom operators are in the nature of use of standard facilities, which do not require any human interface. Further, since the roaming charges are not paid for rendering managerial, technical or consultancy services, said services cannot be construed as fees for technical series as defined under provision...

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In absence of principal agent relationship section 194H not applicable

DCIT Vs. M/s. Cox & Kings (I) Ltd. (ITAT Mumbai)

When there is direct sale transaction between two principals and there is no principal agent relationship, provisions of section 194H are not applicable...

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Posted Under: Income Tax |

Amount paid to RMCs for Foreign Currency Purchase cannot be treated as Commission liable to TDS

DCIT Vs. M/s. Cox & Kings (I) Ltd. (ITAT Mumbai)

DCIT Vs. M/s. Cox & Kings (I) Ltd. (ITAT Mumbai) Assessee has a foreign exchange division approved by the RBI and is authorized to buy foreign exchange and travelers cheques from RMCs and others and sell them to persons in need of them. RMCs are also authorized by RBI to buy foreign currency from non […]...

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Disallowance cannot be made by only giving weight age to nomenclature and without seeing real purpose for payment

Abhijit Majumder Vs. ITO (ITAT Kolkata)

Where assessee paid amount to deliveryman to deliver the newspapers and delivery persons were nothing but casually engaged labourers and they have no other work to perform and assessee had wrongly debited the amount as commission in its books, AO was not justified in making dis allowance under section 40(a)(ia) for no TDS by only giving w...

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TDS U/s. 194H not deductible on sales to distributors on principal to principal basis

Hindustan Coca Cola Beverages Pvt. Ltd Vs. CIT (Rajasthan High Court)

Hindustan Coca Cola Beverages Pvt. Ltd Vs. CIT (Rajasthan High Court) Issues Under Consideration (i) Whether in the facts and circumstances of the case the learned Tribunal was right and justified in holding that assessee was liable to withhold tax at source under S.194H of the Income Tax Act, 1961 amounting to Rs.19,74,842/- (including i...

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Discount on sales cannot be regarded as Commission liable to TDS U/s. 194H

Dish TV India Ltd. Vs Asstt. CIT (ITAT Mumbai)

Out of these four appeals two appeals are filed by the assessee while the other two appeals are filed by the Revenue for against the orders of the Commissioner (Appeals)--4, Mumbai dated 13-2-2017 and 6-2-2017 for assessment years 2011-12 and 2012-13 respectively....

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Section 194H: TDS not applicable on Bank guarantee commission

DCIT Vs. Delta Constructions Ltd. (ITAT Hyderabad)

DCIT Vs. Delta Constructions Ltd. (ITAT Hyderabad) Assessee contends that in order to invoke the provisions of section 40(a)(ia) it has to be shown that the payment made by the assessee is attracted by the provisions of section 194H of the Act i.e., there is liability to deduct tax at source on the bank guarantee […]...

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TDS U/s. 194H not deductible on bank guarantee commission

DCIT Vs. PRL Projects & Infrastructure Lt. (ITAT Delhi)

When the bank issues a bank guarantee on behalf of the assessee, all it does is to accept the commitment of making payment of a specified amount to the beneficiary on demand and it is in consideration of this commitment that the bank charges of fee which is termed as ‘bank guarantee commission’...

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TDS U/s. 194H not applicable on Bank Guarantee Commission

Addl CIT Vs Jaypee Agra Vikas Ltd (ITAT Delhi)

The contract of guarantee does not give any rise to principal - agent relationship between the assessee and the bank and, therefore, the consideration received by the bank on account of guarantee commission cannot be reckoned as commission as contemplated under section 194H and accordingly, there was no requirement to deduct TDS on this p...

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TDS U/s. 194H not applies on discounts on principal to principal basis

ITO Vs Tarun Sales (ITAT Delhi)

ITO Vs Tarun Sales (ITAT Delhi) Since no dealer or sub-dealer was appointed either by BSNL or by the assessee, for the purpose of marketing the products and/or service of the Bharat Sanchar Nigam Ltd., the entire sales were to customers, either directly or through shopkeepers, who rendered services to the customers. ...

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TDS on IUC charges paid to foreign / non-resident telecom operators and discount to prepaid distributors

Bharat Sanchar Nigam Ltd. Vs Addl. CIT (ITAT Delhi): ITA No. 920/Del./2017

Addition on account of discount extended to prepaid distributors Third proviso to section 194H will get attracted only when the nature of payment is “commission or brokerage”. Parties before us agree that majorly the distribution of products by BSNL and MTNL takes place through Public Call Office franchisees since this was an infrastr...

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Secret reference fees paid by diagnostic centre to Doctors is liable to TDS

M/s. Parco Diagnostics & Research Centre Pvt. Ltd. Vs The Deputy Commissioner of Income-tax(TDS), (ITAT Cochine)

he payment made by the assessee as referral fees is directly proportionate or percentage of an amount received by the assessee for providing CT scan and MRI scan and such payment comes within the term 'Commission or Brokerage'....

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No penalty for non deduction of TDS on sale of SIM Cards/recharge coupons at discounted rate

Vodafone Cellular Limited Vs. Additional Commissioner of Income Tax, TDS Range (ITAT Pune)

Tribunal held that sale of SIM Cards/recharge coupons at discounted rate to distributors is not commission and therefore, not liable to TDS provisions u/s. 194H of the Act. Once, the substratum for levy of penalty has eroded there is no question for sustaining the penalty....

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Budget 2017: Increase 2 crore Turnover limit for section 194A/ 194H/ 194I & 194J

Section 44AB - Increased threshold for presumptive tax cases under section 44AD - Consequential amendments required in section 194A/ 194H/ 194I & 194J...

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Posted Under: Income Tax | ,

TDS Rates Chart for FY 2017-18 / AY 2018-19

TDS Rates Chart for Financial Year 2017-18/ Assessment Year 2018-19 vide Finance Act 2017 i.e Budget 2017-18. We have updated the TDS rate chart considering the amendments made by Finance Act, 2017....

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Posted Under: Income Tax |

Discount on Property Purchased from Broker is Capital Receipt

Ms. Vandana Guliani Vs Income Tax Officer (ITAT Delhi)

ITAT Delhi held that any receipt directly and intimately linked with the procurement of capital asset is in the nature of capital receipt and not a revenue receipt. So such brokerage cannot be taxed in the hand of property buyer. ...

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TDS Rates Chart for FY 2016-17 / AY 2017-18

TDS Rate Chart: TDS/TCS Rates Chart for Financial Year 2016-17/ Assessment Year 2017-18 vide Finance Act 2016 i.e Budget 2016-17....

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Posted Under: Income Tax | ,

TDS on payments for procuring or canvassing for advertisements

Circular No. 05/2016- Income Tax (29/02/2016)

Law Related to Tax Deduction at Source (TDS) on payments by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements....

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Diagnostic Labs to deduct TDS on discount given to hospitals/laboratories U/s. 194H

M/s DDRC SRL Diagnostic P Ltd. Vs ITO (ITAT Mumbai)

In the case of M/s DDRC SRL Diagnostic P Ltd. Vs. ITO Mumbai Bench of ITAT have held that If the hospitals/laboratories act as mere link between the assessee and patients, then the discount given by the assessee would definitely fall under the category of Commission liable for deduction u/s 194H of the Act. ...

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S. 194H Discount by BSNL to its franchisee on recharge coupon is not commission

ITO-TDS Vs Bharat Sanchar Nigam Ltd (ITAT Hyderabad)

In the Case of ITO-TDS vs. BSNL, the Hyderabad Tribunal observed that the relationship between the BSNL and the franchisee was recognised by the CBDT by inserting third proviso to S.194H. The assessee being public sector undertaking stands on a different footing and the view taken by Delhi High Court ...

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S. 194H Discount by telecom companies to distributors on recharge coupons is commission, liable for TDS: HC

Hutchison Telecom East Ltd. Vs CIT (Calcutta High Court)

Calcutta High Court held In the case of Hutchison Telecom East Ltd. vs. CIT that the discount allowed to the distributors in respect of starter packs and recharge coupons for its prepaid services will be covered under commission or brokerage, liable to TDS u/s 194H....

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S. 194H TDS not applicable on Charges for use of Swipe Machine paid to banks

JDS Apparels Private Limited Vs CIT (Delhi High Court)

Assessee was engaged in the business of trading in readymade garments. A letter was received from the Assessing Officer, TDS Circle Mumbai that the respondent-assessee had paid 3commission' to HDFC on payments received from customers who had made purchases through credit cards....

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TDS U/s. 194H not deductible on Product Discount Schemes

CIT Vs Intervet India Pvt. Ltd. (Bombay High Court)

The assessee contended that the expenditure under the said claims are only for promotion of sales and hence had no relation to payment of any commission on sales. The assessee contended that therefore tax at source is not required to be deducted as the said expenditure did not fell within the ambit of Section 40(a)(ia) of the Income Tax A...

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TDS not deductible on Payments to banks for utilization of credit card facilities are in

JDS Apparels Ltd. Vs ACIT (ITAT Delhi)

The issue is as to whether the payment in question can be termed as commission paid for rendering services by the bank to the assessee for the recovery of the bill amount and so, whether TDS was deductible thereon u/s 194H and whether non-compliance thereof has rightly resulted...

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TDS not deductible on sum paid to banks for utilization of credit card facilities

Income Tax Officer-(TDS)-2(1) Vs M/s Jet Airways (India) Ltd. (ITAT Mumbai)

The commission retained by the credit card company is therefore in the nature of normal bank charges and not in the nature of commission/brokerage for acting on behalf of the merchant establishment....

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S. 194H TDS not deductible on Sub-Brokerage on buying / selling of units of mutual funds

Dy. Commissioner of Income- tax – 2(3) Vs. M/s S.J. Investment Agencies P. Ltd. (ITAT Mumbai)

the commission or brokerage definition does not include transactions in securities. There is no doubt that Mutual Funds are categorised as securities on which there is no objection from the Revenue either before the A.O. or before the CIT(A). In fact the CIT(A) also gives a finding that the A.O. has not disputed that units of Mutual Funds...

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Cellular companies liable to deduct TDS U/s. 194H on Discount to distributors on payments for recharge coupons

M/s. Cellular Mobile Telecom Services Vs The Income Tax Officer (ITAT Chennai)

The assessee is a cellular company selling SIM cards and recharge coupons. The assessee has deducted TDS on both the sale, i.e. SIM cards as well as recharge coupons upto the financial year 2007-08. Thereafter TDS was deducted only on SIM cards and no TDS was deducted insofar as the recharge coupons are concerned. It was explained before ...

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Applicability of TDS u/s. 194H on commission paid to PCO owners by BSNL/MTNL

The Commissioner of Income Tax (TDS), Chandigarh Vs M/s Bharat Sanchar Nigam Limit (Punjab And Hariyana Highy Court At Chandigarh)

It is well settled in law that a tax withholding liability is a vicarious liability, as a part of tax collection mechanism, in the sense that when there is no primary liability of the taxpayer, proxy liability of the tax deductor also does not survive. In a situation like the one, we are in seisin of, in which the CBDT itself accepts that...

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S. 194H TDS applicable on payment in the nature of commission, even in the absence of relationship of a principal & agent

SKOL Breweries Ltd. Vs Assistant Commissioner of Income-tax (ITAT Mumbai)

Section 194H talks about the payment to a recipient which is the income by way of commission or brokerage. It does not require that the relationship between the payer and the payee should be of a principal and agent. The Explanation to section 194 elaborates on the terms 'commission or brokerage' by including any payment received or recei...

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S.194H TDS not deductible on charges for of utilization of credit card facilities

M/s. Tata Teleservices Ltd. Vs. Deputy Commissioner of Income-tax (TDS) (ITAT Bangalore)

Commission paid to the credit card companies cannot be considered as falling within the purview of S.194H. Even though the definition of the term commission or brokerage used in the said section is an inclusive definition, it is clear that the liability to make TDS under the said section arises only when a person acts behalf of another pe...

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S. 194H No TDS on discount given by IATA agent on Purchase of Ticket by retail customers, group passengers & small time agents

The Assistant Commissioner of Income-tax (TDS) Vs Al Hind Tours & Travels Pvt. Ltd. (ITAT Cochin)

There is no dispute with regard to the fact that the assessee herein is a IATA agent and it is authorised to sell air tickets at a price range that are usually fixed by the airline companies. It is also a fact that the competition between different airline companies has increased due to presence of a number of airline companies and the sa...

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When there is detailed scrutiny with regard to an issue, no re-opening for mere change of opinion

Gujarat Tea Processors & Packers Ltd. Vs Deputy Commissioner of Income-Tax (Gujarat High Court)

At time when query was raised under the head 'Selling & Distribution Expenditure', had there been insistence that TDS was required to be deducted and the amount specified to the tune of Rs. 22,70,869 was not required to be allowed as Trade Incentive without deducting TDS, the same ought to have been reflected somewhere in the computation ...

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No TDS on Bulk Purchase Discount as it is not commission – SC

Commissioner of Income Tax, Ahmedabad and Ors. Vs Ahmedabad Stamp Vendors Association (Supreme Court of India)

The respondent in this civil appeal is Ahmedabad Stamp Vendors Association and the Members of the said Association are licensed Stamp Vendors. We are satisfied that 0.50% to 4% discount given to the Stamp Vendors is for purchasing the stamps in bulk quantity and the said discount is in the nature of cash discount....

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No TDs deduction U/s 194H on Foreign Commission to Non-Resident

ACIT Vs. Nidhi Exports (ITAT Delhi)

No TDS was required to be made because payment of commission are made to non-resident overseas agent. As such no income is arising to the non-resident agent in India. So, no TDS is deductible u/s 194H of the Act, which is applicable for resident Indians only, even the provisions of section 195 is not applicable as payments are made to non...

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No application of section 194H in respect of discount received on purchase of plots

D.C.I.T. Vs Shri Surendra Mohan Mukhija(ITAT Delhi)

In the instant case before us also, the assessee parted with a portion of his commission received from the builder for helping the intending buyers of flats. In other words, the purchasers received discount in the purchase price .There is nothing to suggest that the purchasers of flats rendered any service to the assessee rather the asses...

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Bank Guarantee Commission not liable to TDS U/s. 194H as it is is not a transaction between principal and agent

Kotak Securities Limited Vs. Dy. Commissioner of Income Tax TDS Circle 2(1) (ITAT Mumbai)

Kotak Securities Limited vs. DCIT (ITAT Mumbai) - When we look at the connotations of expression ‘commission or brokerage’ in its cognate sense, as in the light of the principle of noscitur a sociis as we are obliged to, in our considered view, scope of expression ‘commission’, for this purpose, will be confined to ‘an allowanc...

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No TDS on payment for purchase of goods / services through credit card transactions

Recently, an opinion was sought from me by a client regarding TDS implications under Chapter XVII-B of the Income-Tax Act, 1961 (the Act), in respect of merchant service fees payable in the course of settlement of credit card transactions for the purchase of goods / services. In the aforesaid transactions, the functions of the relevant e...

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Posted Under: Income Tax |

If agreement was on principal-to-principal basis, payments made by the assessee to the distributor cannot be treated as commission liable for TDS U/s. 194H

CIT Vs. Jai Drinks (P.) Ltd. (Delhi High Court)

CIT Vs. Jai Drinks (P.) Ltd. (Delhi HC)- In the instant case, it was held that since the agreement between the assessee and the distributor clearly stated that the agreement was on principal-to-principal basis, payments made by the assessee to the distributor were incentives and discounts and were not to be treated as commission liable fo...

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Existence of a Principal – Agent relationship must for applicability of Section 194H

SRL Ranbaxy Ltd. Vs Addl. Commissioner of Income Tax (ITAT Delhi)

SRL Ranbaxy Ltd vs. ACIT (ITAT Delhi) - In the present case, no income was found credited to the account of the collection centers. The loss on account of any damage was to be borne by the collection centers. The expenditure on salary/staff of the collection centers was to be borne by the collection centers...

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Role of Chartered Accountant in Your Growth

What a chartered accountant does exactly is something unknown, which is of course if you’re not an accountant yourself. For many people, an accountant is something that they feel they only need once a year when they are doing their taxes returns. But business and CA are more than just taxes. If you are only using your CA for your tax re...

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Posted Under: Income Tax |

Section 194H – Whether difference between commercial price and published price can be classified as commission or not?

CIT Vs. Qatar Airways (332 ITR 253) (Bombay High Court)

CIT v. Qatar Airways (332 ITR 253) - The agents of the assessee (airline) were entitled to sell tickets at any price between the fixed commercial price and the published price. As a result the assessee would have no information regarding the final rates at which tickets were sold. It would be impracticable and unreasonable to accept the a...

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Discount by Cellular companies to distributors on SIM Cards and Recharge Coupons sales is commission’ and TDs is deductible

Vodafone Essar Cellular Limited Vs. ACIT (Kerala High Court)

Recently, the Kerala High Court in the case of Vodafone Essar Cellular Limited v. ACIT held that the discount given by the taxpayer at the time of sale of SIM Cards or Recharge coupons to the distributors is commission for the services rendered to the taxpayer. Accordingly, the taxpayer was liable to deduct tax at source on the commissio...

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Discount allowed on sale of Sim Cards is nothing but commission and TDS is applicable under section 194H of Income Tax Act 1961

Vodafone Essar Cellular Ltd. Vs. ACIT (Kerala High Court)

Vodafone Essar Cellular Ltd. v. ACIT On this issue, the Kerala High Court observed that it was the SIM card which linked the mobile subscriber to the assessee`s network. Therefore, supply of SIM card by the assessee-telecom company was only for the purpose of rendering continued services to the subscriber of the mobile phone. The positio...

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Procedural Provisions Relating to TDS and Filing of TDS Statements under Income Tax Act 1961

T.D.S means the Tax deducted at source. Whenever a person liable to deduct tax of another person under Income Tax Act, deducts tax, the credit of such tax is given to the deductee when his liability to pay income tax is calculated. Such credit is given on the basis of the information given by the deductor to the Income Tax Department by w...

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Posted Under: Income Tax |

TDS u/s.194H on Commission paid on sale of pre-paid & post-paid SIM card

CIT Vs. Idea Cellular Ltd. (Delhi High Court)

Whether on a true and correct appreciation of the relationship between the assessee and its distributors, the learned Income Tax Appellate Tribunal erred in holding that the payments paid by the assessee is not commission as envisaged under Section 194H of the Act?" This question has arisen for determination for the Assessment Years 2003-...

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Summary of Important Income tax provisions: Union Budget 2010-11

Finance Minister Pranab Mukherjee took the first step towards implementation of the Direct Taxes Code (DTC) on Friday. While retaining the basic exemption limits for all income levels (as in the DTC), he increased the other slabs. For instance, while the basic exemption limit for individuals has been retained at Rs 1.6 lakh, the 10 per ce...

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Posted Under: Income Tax |

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