Is TDS deduction mandatory for advertisement agencies whose turnover is 1 crore, which undergo through audit, while making payents to the newspapers/media houses? For example ABCD ad agency booked an ad for XYZ newspaper. The advertiser Mr. Shah paid Rs. 100+5%=Rs. 105/- to ABCD for the advertisement. Now should ABCD deduct 2% TDS while making payment to XYZ after deducting its 10% discount/commission? Should ABCD pay 100-10%=90+5%=94.5 or 100-10%=90-2%=88.2+5%=92.61 to XYZ? If there's any specific act or law about this then pease share the same.
Yes TDS deduction is compulsory for advertising agency for those undergoing tax audit. Refer section 194c of income tax which is on TDS on contractors. The arrangement between you and advertisement agency is that of a contract.
Again on commission also news paper agency has to deduct tax.
Thanks for replying. I was talking about TDS deduction on payments made by ad agencies to newspapers/media houses. If your answer is yes then please check these links- circular_5_2016.pdf
Although in these circulars nothing is mentioned whether the ad agency is undergoing audit and whether the same is registered under INS or not but most of the agencies don't deduct TDS as per these rulings.
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