We have outsourced our training to another organization, and we pay them every month after deducting TDS. A deduction happens at their end also, which means they are ultimately losing money because of double deduction. Can anyone educate me on this? Is it necessary for both deductions to happen? What are the rules related to this?
Thanks in advance.
Regards, Aji
From India, Bangalore
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Thanks in advance.
Regards, Aji
From India, Bangalore
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We make the payment after deducting TDS at our end, and another deduction is done at their end too. I am not quite aware of the rules regarding TDS deduction, and thats what I want to know. Thanks
From India, Bangalore
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From India, Bangalore
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Dear Aji,
The TDS deduction happens at your end. The TDS that you have mentioned (double deduction) is actually not a TDS but the total tax payable on the income generated by them. Both aspects are different.
Hope this provides clarity.
Regards,
Sonali
From India, Thana
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5The TDS deduction happens at your end. The TDS that you have mentioned (double deduction) is actually not a TDS but the total tax payable on the income generated by them. Both aspects are different.
Hope this provides clarity.
Regards,
Sonali
From India, Thana
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TDS is nothing but an advance payment of tax to the government. The deductee has the right to claim the TDS certificate for the entire year from the deductor. After the end of the financial year, while submitting the Annual Tax Return to the concerned government departments, the deductee has to calculate his total revenue generated during the year and calculate the total tax payable. If the calculated tax varies from the TDS deducted, then he has to pay or claim the differential amount to or from the concerned government department.
Regards,
From India, Hyderabad
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Regards,
From India, Hyderabad
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Dear Aji I have not understand your question please try to explain it in a simple way definitely will help it out.
From India, Pune
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From India, Pune
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Let me try to explain. However, I am not sure how well I can do that since I am not a Finance/Accounts guy. Our client recently contacted us and asked if it is possible to pay them without deducting TDS at our end, as a deduction happens at their end as well. This was the reason for my first post.
Regards,
Aji
From India, Bangalore
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Regards,
Aji
From India, Bangalore
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Dear Alpesh and Siddiqui,
Let me try to explain. However, I am not sure how well I can do that since I am not a Finance/Accounts person. Our client recently contacted us and asked if it is possible to pay them without deducting TDS at our end since a deduction also occurs at their end. This was the reason for my initial post.
Regards,
Aji
Dear Aji,
In case you pay your contractor without deducting TDS, you will be penalized. Can you clarify the point "deduction happens at their end also"? How does it happen? Who deducts TDS for the second time for the same amount?
Regards,
From India, Hyderabad
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Let me try to explain. However, I am not sure how well I can do that since I am not a Finance/Accounts person. Our client recently contacted us and asked if it is possible to pay them without deducting TDS at our end since a deduction also occurs at their end. This was the reason for my initial post.
Regards,
Aji
Dear Aji,
In case you pay your contractor without deducting TDS, you will be penalized. Can you clarify the point "deduction happens at their end also"? How does it happen? Who deducts TDS for the second time for the same amount?
Regards,
From India, Hyderabad
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Siddiqui has explained the right point. Just let me know who has deducted the TDS a second time. If you have taken any services, please let me know which type of service you have availed (i.e., job work, professional service, or any other service). Please reply soon so I can provide you with the final answer.
Regards,
[Username]
From India, Pune
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Regards,
[Username]
From India, Pune
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By deduction at their end could either be tax at a later stage. This is my assumption based on what the person who has posted this query mentioned. But I have a question myself. Let's say I want to charge a party an x amount for professional services. If I want to receive the whole x amount I intend to charge, is it ethical to present it as adding X+10% of the amount and billing the client so that my 10% TDS is accounted for, allowing me to maintain my expected fees without reduction?
Alternatively, is there another approach to avoid TDS affecting my actual charges?
Can anyone shed some light on tax savings, as I believe a 30% deduction on the earned amount seems severe? Please correct me if I am mistaken.
Regards,
Tanuj
From India, Bangalore
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Alternatively, is there another approach to avoid TDS affecting my actual charges?
Can anyone shed some light on tax savings, as I believe a 30% deduction on the earned amount seems severe? Please correct me if I am mistaken.
Regards,
Tanuj
From India, Bangalore
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From your above point, I presume that TDS on your professional charges is to be borne by your client. In such a case, your appointment letter/contract agreement with the client should contain the clause saying: "TDS on professional charges is to the client's account and the original receipts of IT challans paid on your behalf are to be handed over to you."
However, no client will prefer this clause; rather, they will opt to include the difference amount with your professional charges and deduct TDS from you.
From India, Hyderabad
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However, no client will prefer this clause; rather, they will opt to include the difference amount with your professional charges and deduct TDS from you.
From India, Hyderabad
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