Wednesday, November 15, 2006

NEWSPAPERS’ AD PAYMENTS LIABLE TO BE TAXED

The Central Board of Direct Taxes has informed the Indian Newspaper Society (INS) that Tax Deducted at Source (TDS) is liable to be deducted by newspapers on payments made by them to advertising agencies. The CBDT has written to the INS following a clarification sought by the latter on whether TDS was deductible on payments made by them to advertising agents. The contention of INS was that such payments are not in the nature of a commission but a discount. So no TDS was liable on such payments. However, revenue department officials said the CBDT was of the view that such payments were covered by the definition of the term ‘commission or brokerage’ given in Section 194H of the Income Tax Act and hence liable to TDS.

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