Search Results For: tax deducted at source


QUERY: Mr. Champaklal seeks further advice from you on behalf of his clients.

(a) One of Mr. Champaklal’s clients is a financier and he has asked him whether section 194A would apply to Bill Discounting Charges paid by him to another financier. Mr. Champaklal seeks your advise in the matter

(b) The same financier client of Mr. Champaklal also wants to know whether the difference between price and face value of Commercial Paper is to be treated as interest or as discount. Mr. Champaklal seeks your advice in this matter also.

(c) Taking a cue from an exporter whose writ petition (in respect of 80HHC matter) had been handled by him. Mr. Champaklal has started the practice of levying interest in his Memo of Fees itself in respect of some of his regular clients who are regularly irregular in payment of his fees. His clients have enquired as to whether they would be liable to deduct tax at source u/s. 194A in respect of the interest charged by him.

ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,

CBDT Cir.No. 65{F. No. 275/79/TTJ] dt. 2/9/71.

“Where the supplier of goods makes over the usance bill/hundi to his bank which discounts the same and credits the net amount to the supplier’s A/c. straightway without waiting for realization of the bill on due date,

QUERY: The Finance Act, 2015 has amended clause (v) of sub section (3) of Sec. 194A w.e.f. June 01, 2015. Accordingly TDS is now required to be deduc-tion by a Co-op Bank from interest payment to its members subject to other provisions.

Now, can payment be made by other Co-operative Bank to other Co-operative Society without TDS?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: ,

Section 194A(1) of the Income tax Act, 1961 provides

“Any person, not being an Individual or a Hindu Undivided Family, who is re-sponsible for paying to a resident any income by way of interest other than in-come by way of interest on securities shall at any time of credit of such income

QUERY: Assessee engaged in imports and/or exports engage services of Clearing and Forwarding (C & F) agents. Payments to such C & F agents typically comprises of following:

(a) Reimbursement of freight paid to shipping companies or airlines.

(b) Reimbursement of freight on local transportation.

(c) Reimbursement of import or export clearing expenses like payments to Port Trust, Airport Authorities of India, miscellaneous charges, etc.

(d) Reimbursement of bonded warehousing charges.

(e) Reimbursement of Customs duties and Octroi.

(f) Reimbursement for Crane and Machinery charges to Port Trust. etc.

(g) Agency service charges.

(h) Service tax.

Whether any tax is liable to be deducted u/s. 194C of the Income-tax Act, 1961 on any of the above payments to C & F agents?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,

In ITO vs. Dr. Willamer Schwable India (P) Ltd. [3 SOT 71 (Del.)], the Tribunal has held that reimbursement of actual expenses where no profit element is involved, is not liable for the TDS. Similarly, it has been held by the Delhi High Court in Handicrafts & Handloom Export Corpn. of India vs. ITO [140 ITR 532]; that the amounts received by an assessee

QUERY: Mr. X pays freight charges of Rs. 3,00,000 in a year to ABC Pvt. Ltd, whose business is only to arrange truck owned by different persons. The said companies does not own any truck but acts only as a commission agent. The buyer of goods pays freight charges to the said company and obtain its PAN.

Now, whether payer is liable to deduct tax u/s. 194C of the Act while mak-ing payment to the said company, not knowing who is the owner of the truck and whether such person owns more than 10 trucks? If not wheth-er any declaration from the Transport Agent needs to be obtained in terms of amended Sec. 194C w.e.f. June 01, 2015.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,

From the query, it is clear that a payer, is seeking help from the company, for arrangement of trucks from others. The company does not own any truck therefore it is only entitle for commission. Hence, the payer is paying to the company not for carrying out any work.

QUERY: A Ltd. is engaged in the business of running a call centre. The company also runs a training centre for people wanting to join call centre. The company has appointed through written contracts various franchisees to run training centres in various parts of the city. As per the terms of the contract, the franchisees collect training fees and after retaining certain amount towards recoupment of their cost and commission, remit balance amount to A Ltd. Is TDS applicable in such case? If so, on what amount and at what rate? How will this be practical since A Ltd. is not directly making any payment to the franchisees?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,

– Theory of Principal and Agent would apply.

– A Ltd. – Principal in agreement with Franchisees

QUERY: PQR Group is into various businesses in India. It has a holding company which has various subsidiary companies each carrying out different business. The holding company has taken a complete building on rent wherein each floor is occupied by a subsidiary company. The rent is paid by holding company after due deduction of taxes at sources. At the year end, the rent is apportioned to all the subsidiary companies in the ratio of utilisation of premises by each of them. Whether the subsidiary companies are liable to deduct tax at source from such apportionment by the holding company?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS:

When a holding company paid rent to the landlord, it deducted the tax and paid to the Central Govt. At the end of the year, the holding company apportioned the rent on the basis of ratio of utilisation of premises by the subsidiary companies

QUERY: ABC Pvt. Ltd., is engaged in the business of manufacturing of coke. The company purchases raw material from another company XYZ Ltd. As per agreed terms, ABC Pvt. Ltd., had reimbursed certain expenses incurred by XYZ Ltd., towards ground rent, wharfage charges, stevedoring charges, etc. The reimbursement does not contain any mark up and bills of actual services provided on XYZ Ltd., along with debit note for reimbursement of expenses. These expenses are accounted in the books of ABC Pvt. Ltd., and profit and loss account reflects each such expenses separately.

(a) Whether ABC Pvt. Ltd., is liable to deduct TDS on reimbursement of expenses to XYZ Ltd.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: ,

On reimbursement of expenses no TDS is required to be deducted as per judgment of the Supreme Court in GE India Technology Centre Pvt. Ltd., v. CIT [327 ITR 456].

QUERY: Mr. & Mrs. H are joint owners of a plot of land. The plot is sold to Mr. T for Rs. 52 lakhs

(i) Whether the tax is required to be deducted u/s. 194IA, though the amount payable to each co-owner is less than Rs. 50 lakhs?

(ii) Whether the limit is qua immovable property or qua transferor/s?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: ,

Section 194IA provides that any person being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property

QUERY: Number of professionals including C.A., C.S., Architects, Interiors and Business man like brokers are maintaining books on cash basis (receipt basis) and claiming TDS in the year of receipt of income irrespective of the year to which it pertains. Before introduction of e-filing system, such claim of TDS was allowed in the year of receipt of income. This was settled practice. But after e-filing regime, where credit is given on the basis of 26AS, such professionals and brokers are not getting credit of such TDS due to mismatch of the year. On this account many rectification are also pending.

Kindly enlighten how to overcome this problem.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,

As clarified by CBDT and prudent accounting practices, you should account TDS in the fees only. Any difference between actual TDS claimed by you and from AS 26 may be informed to the Assessing Officer for corrective action for issuing refund/

QUERY: Pursuant to corporate governance norms of SEBI, listed companies are required to appoint Non-executive Independent Directors who may be industrialists or professionals like Advocates, CAs, etc. They are paid sitting fees for attending board meetings of the company. They are also paid a commission based on percentage of net profits of the company. Whether such payments are liable to TDS and if yes, under which section
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: ,

– Non-executive Independent Directors are providing managerial services. Hence, Explanation 2 to section 9(1)(vii) would be applicable, which reads as under:

“Fee for technical services” means any consideration (including any lump sum