Tds applicability and liability

[sunil mehta]

A sub-travel agent purchases air/rail tickets from main travel agent and issues to his clients by charging 'service chgs.'@rs.100/-per ticket over and above the ticket purchase price.If the 'service chgs.' exceeds rs.50000/- in case of his particular client in a fin.year whether the tax has to be deducted at source by his client if the payer falls under 'specified categories' u/s 194C.?Note:The invoice is not inclusive of 'service chgs.'Ticket service chgs are shown separately in bill. 2)If not liable to tds u/s 194C.then under which clause the payer is liable to deduct TDS?

AI Summary

Service Charges by Sub-Travel Agents Trigger TDS Under Section 194H, Not 194C, for Commissions Exceeding Rs. 50,000 Annually. A sub-travel agent purchases tickets from a main travel agent and charges clients a service fee of Rs. 100 per ticket. If these service charges exceed Rs. 50,000 for a client in a financial year, the question arises whether tax must be deducted at source under Section 194C. The reply indicates that TDS under Section 194C is not applicable, as the activity is considered a commission. Therefore, the provisions of Section 194H should be considered, and TDS should be deducted on the commission portion only.