Please Help: TDS in special cases
Posted Date : 26-Sep-2011 , 05:40:46 pm | Posted By: Manu
Category :
Income Tax | Answers :
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Comments :
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I am a distributer of a moile company.The company has paid commission to retailers directly by trasfering the amount to my retailers in form of virtual recharge & in turn company has deducted TDS on our account showing debit/credit entries to our account. Please suggest me that shall i omit those enteries in my books and not claim TDS on these entries(as those are not part of my income and neither i have transfered any amt to retailers it is the company who transfers the amount). If i incoporate those entries in my books, i will stand liable(will i be liable) for deducting TDS on those which is not possible for me to deduct as i am unaware of amount that is being transfered to the retailers and i play no role in tranfering the amount. Please suggest me the correct accounting treatment for the same. |
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Answers:
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 Answer by: Ashish Karundia |
| Dear Manu,
I would like to clear a few facts:
1. Whether you were liable to make nay payments to the retailers. If that be the case, then why the company is paying on your behalf i.e. is there any arragngement between you and the Company that the Company will directly pay the Commsiion on YOUR BEHALF.
2. If you are not liable to make the payment to the retailers, then its none of your business.
3. Please check your 26AS and lemme now whether the TDS deducted is being shown in your PAN Number.
Please confirm the same asap.
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| Answer by: Ashish Karundia |
| Dear Manu,
The distributor is liable to deduct TDS u/s 194H on the amount paid to retailers. However, if the distributor is individual/HUF, then in such case individual/HUF will be liable to deduct TDS ONLY if they were liable to Tax Audit in the immediately previous financial year.
Further, I would request that you (distributor) to show the entries in the books of accounts so as to give true picture because if he is not showing the same, then even in such case, the department can dig out the information from 26AS. Therefore,it is advisable to show the same in order to avoid interest and other penal consequences.
Hope the above meets your query.
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| Answer by: Ashish Karundia |
| Dear Manu,
The clause makes it amply clear that any liability on account of Income Tax or Service tax will that be of the distributor. In other words, the liability to deduct TDS is on the distributor.
I would also lyk to highlight that in this case, you may also be liable to pay service tax under telecommunication service...
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| Answer by: Ca Nitin |
| Dear Manu can you plz tell me that company deduct ur TDS on full amount of commission.than it is ur income.& which u pay to retailer is ur exp.than u should deduct TDS.let us take an e.g.MRP of recharge 100,company sold u on Re 90,& deduct tDs u/s 194H on Rs 10/-now rs 10 is ur income.than u transfer to retailer rs 94 than u should deduct TDS on Rs 6/-& that is ur exp.
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| Comments |
| Posted By : Manu |
28-Sep-2011, 11:29:49 |
| Dear Sir,
Can you suggest me how can i deduct TDS in future,if I am not paying the above sum to the retailers.(The method i shall adopt to deduct TDS. |
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| Posted By : |
26-Sep-2011, 11:02:55 |
| Sir,
The agreement speaks as follows:-
The distributer shall achive the POS expansion targets as set by company from time to time.the distributer shall settle the POS(Retailer) commission at its own level for services rendered by the POS as per norms communicated by company from time to time .HOWEVER THE COMPANY RESERVES THE RIGHT TO APPOINT,SERVICE & SETTLE THE COMMISSION OF POS(RETAILER)WITHOUT ANY INTERVENTION FROM DISTRIBUTER. In case POS commission is directly settled by the company,the amount will be recovered from Distributer and all statutory liablities under Income Tax & Service Tax as applicable shall be responsibility of the distributer.
Please Suggest Ashish Ji |
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| Posted By : Manu |
26-Sep-2011, 10:32:27 |
| Thank You Sir.
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| Posted By : Manu |
26-Sep-2011, 08:38:45 |
| the credit is there in 26 AS |
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| Posted By : Manu |
26-Sep-2011, 08:38:14 |
| Yes the TDS credit is given to the distributer sir.The company is paying on behalf of distributer as per agreement. But the company is not willing to give detail of retailers as to how much commission is credited to each distributer several times during the year. |
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