SANJAY MISHRA (Assistant Manager Accounts) 27 August 2010

TDS on service charged by Travel Agent

Sir, My Query is that if i book my air ticket with Travel Agent. They raise one bill like this.

Air Ticket Charges Rs 1,00,000/-

service tax Rs 600/-

Service Charges Rs 300/-

Total Rs 1,00,900/-

Please advise me I deduct the TDS on Service Charges Rs 300/- how can i treat it is Professional Charges, Commission or brokerage or Contract Charges. 2 Question is that i deduct the TDS on RS 300/- or Rs 100900/-.

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3 Replies

pankaj Kumar (Sr. Finance Executive-Taxtation) 27 August 2010

Dear Sanjy

1. Rs 300 Service Charges would be Your Indirect Expense it's Not treated as commission or brokegare.

2. TDS deducted on Rs. 100900/-

SANJAY MISHRA (Assistant Manager Accounts) 27 August 2010

Dear Pankaj

I want to know that i deduct the TDS under which catagory i.e

TDS on Professional Charges

TDS on Commission

TDS on contractor

SANJAY JOIL (LAW STUDENT) 27 August 2010

I think you will have to deduct tax on RS.300 only subject to other provisions of section 194 of Income Tax Act 1961. Rs. 100000/- is the cost of ticket, hence that is not the income of that travel agent. Service tax is also not taxable. Only charges taken by him are taxable if exceeds the limit of 5000 u/s 194H or u/s 194C (30000) Pankaj Kumar sir, please clarify the which section is applicable in this case.

) Tax Deduction at Source from Payments other than Salary

(A) Summary of TDS Rates w.e.f 01/07/2010:

a) In the case of Payments to Resident:

Section	Heads of Income	When to Deduct Tax at Source	TDS Rate
194-A	Interest other than interest on securities	When the aggregate of payments exceeds Rs.5000/- in a financial year.	10%
194-C	Payment / credit to contractors	Individual Payment Exceeds Rs.30000/- or Aggregate of payments exceeds Rs.75000/- in a financial year.
	- being Individual or Hindu Undivided Family		1%
	- being any person other than Individual or Hindu Undivided Family		2%
194-D	Insurance Commission (Including corporate agents and insurance brokers)	When the aggregate payments during the financial year exceeds Rs.20000/-	10%
194-H	Commission or brokerage (not being insurance commission referred to in section 194D)	When the aggregate payments during the financial year exceeds Rs.5000/-	10%
194-I	Payment of Rent	Aggregate of payments exceeds Rs.180000/- in a financial year.
	- Rent of plant, machinery or equipment.		2%
	- Rent of land, building, furniture & fittings		10%
194-J	Fees for professional or technical services	Aggregate of payments exceeds Rs.30000/- in a financial year.	10%

Note:

(1) Levy of Surcharge, Education Cess and Higher Secondary Education Cess has been discontinued by Finance (No.2) Act, 2009 at the time of TDS from payments other than payment of salaries to any resident.

(2) Non-quoting of PAN

As per the provisions of Section 206AA introduced by the Finance (No.2) Act, 2009 tax is deducted at a higher rate of 20% in case the deductee fails to quote its PAN or quotes incorrect PAN to the deductor at the time making payment. Hence it is advisable to instruct all the deductees to quote the correct PAN in all the correspondences.