TDS and income tax for brokerage or commission for foreign transactions

1. Did not understand. Pls redraft specific question

2. You can receive it under your name or your companies name as per your wish.

3. You don't need to deduct any tds.

4. Income tax shall be payable on the profit part. whatever profit you make out of the commission you earn, you will have to pay tax as per your slab rate.

5. GST shall not be applicable if both buyer and seller outside India and certain conditions are met (such as you have documents like bill of entry etc showing thay goods moved from one country to another without entering indian borders. In case seller is in India, then you will have to pay GST on the commission you earn.

Hi

For income tax purposes, there is no point of TDS deduction as you are receiving income from a foreign party and not vice versa. TDS provisions are not applicable. Such commission income shall be taxable.

Under GST, if your annual turnover is less than 20 lacs, GST registration is not required.

Once registered under GST, GST shall be charged on commission amount if seller is Indian. If both seller and buyer are outside India, GST may not be charged provided specified conditions are met.

We may discuss the issues further.

Hello,

You can receive the commission income on your name or if you have formed a company/firm, under the company/firm name.

TDS deduction won't be required.

Income Tax would be applicable to the net income as per slab rates.

GST won't be applicable if both the buyer and the seller are outside India.

In the case of Indian seller paying commission, TDS deduction would be required by the seller @5% on the commission amount. Further income tax applicable to you would be based on slab rates.

I hope this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

-TDS provision is not applicable on the same.

As per my understanding, your services fall under the category of intermediary services, place of provision of services will be place of service provider (I.e. India)

Definition of intermediary is contained under section 2 (13) of Integrated Goods and Service Tax Act, 2017 and the same is reproduced here under for ready reference ;

“intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account”

As per Section 13 (8) (b) of the same Act, the place of supply of “intermediary services” shall be the location of the supplier of services. Therefore, the supply of the intermediary service is in the taxable territory and so the service is taxable and as a service provider, you have to discharge the tax liability.

-GST registration is mandatory for intermediary services without any threshold limit.

-Intermediary generally charge commission against the services provided by them.

-The commission income so earned is subjected to GST@18% and all the provisions of GST law is applicable accordingly.

- You need to issue an invoice to the company. If they are paying you a fixed amount and not paying GST in addition, you simply need to do reverse calculation of GST according to the amount so received.

- Basically GST is a collection from customer and not from own pocket.It is upto you how to collect it from customer either by increasing the commission amount or charging GST separately on the current commission.

-In case there is no commission for a particular period, you will have to file NIL returns. GST shall have to be paid for the month in which invoice is made OR payment is received- whichever is earlier.

-If you are working as sole proprietor (which is better then company) then income tax would be calculated on slab basis and not on flat rate i.e. 30%. Income Tax would be applicable to the net income/profit as per your slab rates.

If you need any further assistance, please let me know.

We may assist you in entire procedure.

It is advisable to take a phone consultation for detailed discussion.

Yes you can take it in your companys name if that's your business.

TDS is not to be paid it is being deducted by the person paying you.

If the company is outside India they might not deduct TDS.

Income tax depends on the amount of income and expenses.

No GST on same.

No the things would be different if the person is situated in India.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Hi

Yes you can receive the commission or brokerage on your company name

Provision of TDS is not applicable here.

We need a detailed discussion w.r.t income tax

Gst registration is not required