Monday 8 April 2013

SUB BROKING COMMISSION ON SHARE TRADING IS EXEMPT FROM TDS…!!!


In My Opinion

“Any person paying commission (other than that referred to in Sec.194D of the Income Tax Act) or brokerage exceeding Rs. 5,000/- per annum to any resident person is liable to deduct tax at the rate of 10% at the time of credit or payment, whichever is earlier, as per Sec. 194H of the Income Tax Act. Commission or Brokerage includes any payment received directly or indirectly by a person acting on behalf of another person for non-professional services for buying or selling of goods or asset, valuable article or things that are not securities.

Securities have meaning as per the Securities Contract (Regulation) Act, 1956, and includes shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities in or any of any incorporated company or other body corporate; derivatives; units or any other instrument issued by any collective investment scheme to the investors in such schemes; security receipt as defined in Sec. 2(zg) of the Securitization And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; government securities; such other instruments as may be declared by the Central Government to be securities; and rights or interests in securities.

As payment of brokerage to sub-brokers arises from brokerage received on securities, no TDS is deductible on payment of commission on securities to sub-broker.”


It is advisable
“The main broker to deduct TDS on payment to sub-broker to be on a safer side.”

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