TDS u/s 194H - Legibility of cellular mobile telephone service ...

Income Tax

March 1, 2024

TDS u/s 194H - Legibility of cellular mobile telephone service providers to deduct TDS on commission payable to franchisees/ distributors. - nature of relationship between a principal and an agent or principal to principal - The Supreme Court held that the assessees are not obligated to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from third parties/customers, or while selling/transferring the prepaid coupons or starter-kits to the distributors. The Court clarified that Section 194-H does not apply to the circumstances of this case because the discounts offered do not constitute a commission or brokerage. - The nature of transaction and relationship does not fit the principal-agent framework required for the application of Section 194-H.

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