A client has a contract with an advertising agency, the agency incurrs the expenditure and the same is reimbursed by the client. however the agency charges the commision which is shown in the invoice separately along with expenses to be reimbursed.
Please suggest that whether the commission amount will be subject to deduction U/S 194H or the whole billamount will be subject to deduction U/S 194C.
Clarification on Tax Deduction: Determine if Advertising Agency Commission Falls Under Section 194H or Entire Bill Under Section 194C. A client has a contract with an advertising agency where the agency incurs expenses reimbursed by the client, and charges a separate commission. The query seeks clarification on whether the commission should be deducted under Section 194H or if the entire bill amount should be deducted under Section 194C. The response suggests examining the contract to determine the nature of the relationship. If it is a principal-to-principal relationship, the entire amount is liable under Section 194C. If it's a principal-agent relationship, only the commission is liable under Section 194H. (AI Summary)
TaxTMI 
TaxTMI 
