Tax on commission.

Querist : Anonymous (Querist) 16 January 2012 This query is : Resolved
A relegious Trust is paying some amount to an individual towards commission for helping them to get some donations to the trust. What Tax implications will have to face by the individual. He is not a commission agent or broker. the said commission may be one time but huge. He is ready to complay all statutory rquirements.

Kindly give your valluabel opinios / suggestions.

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Deepak Nair (Expert) 16 January 2012
Whatever may be the amount, he have to show the source of the amount in his income tax returns and pay income tax with respect to the said income.

Shailesh Kumar Shah (Expert) 16 January 2012
Show amount received in ITR Return as "Income from other Sources", if he is liable to file ITR return.

Sanjeev (Expert) 16 January 2012
If the amount is paid as commissiion TDS should be deducted on the same by the Trust but the wider issue is paying of such commission would be ultra-vires the trust deed it would not be valid to pay commission for procuring donations.

The commission may be disaloowed by the assessing officer if the accounts are scrutinised at any point of time.

Querist : Anonymous (Querist) 16 January 2012
Mr.Deepak, Sailesh and Sanjeev thank you very much for your response.
Dear Sanjeev, mostly trusts are having 80G IT certificate. On what contest it will be ultravires. Nothing cheating takes place. It is not a payment for procuring commission. It will not be a bribe or some ting, it will not be wrong accounting, the amount is paying by the trust is through bank transaction only. The mediater co-ordinating, helping supporting to complete the process. In such case what is your suggestion to get the clearence.

Shailesh Kumar Shah (Expert) 16 January 2012
Dear Author,

I agree with views of Mr.Sanjeev on part of Trust. There is more chances to disallow by Assessing officer at the time of scrutiny.
you plea is not maintainable.

R.Ramachandran (Expert) 17 January 2012
Dear Mr. Shailesh, what about the liability under service tax?

prabhakar singh (Expert) 17 January 2012
One more valid question rightly raised by Mr.R.Ramachandran.

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