Income Tax withholding amount paid by the buyer instead of seller?

[schez]

Hi Every Body. I've a question. If we purchase something from a supplier for Rs. 10,000. His income tax should be withheld @ 3.5% Rs. 350 and he should be paid Rs. 9,650. But at times we have to face a case where suppliers don't want to pay the withholding tax and asks us to bear the tax liability. In that case, we ask supplier to make an invoice for Rs. 10,363 (10,000 / (1-0.035=0.965)) to accomodate his (un-lawful)demand.

But in a case where Tax Slabs are as follows;

1 Where the gross amount of rent does not exceed Rs.150,000 Nil
2 Where the gross amount of rent exceeds Rs.150,000 but does not exceed Rs.1,000,000 (10 % of the gross amount exceeding Rs.150,000.)
3 Where the gross amount of rent exceeds Rs. 1,000,000 (Rs. 85,000 + 15% of the gross amount exceeding Rs. 1,000,000.)

What amount should be worked out to bear Tax Liability by the tenant, if the monthly rent is Rs. 15,000/month and 100,000/month respectively.

 

[stapel]

Hi Every Body. I've a question. If we purchase something from a supplier for Rs. 10,000. His income tax should be withheld @ 3.5% Rs. 350 and he should be paid Rs. 9,650. But at times we have to face a case where suppliers don't want to pay the withholding tax and asks us to bear the tax liability. In that case, we ask supplier to make an invoice for Rs. 10,363 (10,000 / (1-0.035=0.965)) to accomodate his (un-lawful)demand.

But in a case where Tax Slabs are as follows;

1 Where the gross amount of rent does not exceed Rs.150,000 Nil
2 Where the gross amount of rent exceeds Rs.150,000 but does not exceed Rs.1,000,000 (10 % of the gross amount exceeding Rs.150,000.)
3 Where the gross amount of rent exceeds Rs. 1,000,000 (Rs. 85,000 + 15% of the gross amount exceeding Rs. 1,000,000.)

What amount should be worked out to bear Tax Liability by the tenant, if the monthly rent is Rs. 15,000/month and 100,000/month respectively.

How would the computations for rent be any different from the computations for suppliers? Also, what is meant by "respectively"? Which value is the monthly rent? Or are you computing for two different situations?

When you reply, please include a clear listing of your efforts on this exercise. Thank you!

 

[JeffM]

Hi Every Body. I've a question. If we purchase something from a supplier for Rs. 10,000. His income tax should be withheld @ 3.5% Rs. 350 and he should be paid Rs. 9,650. But at times we have to face a case where suppliers don't want to pay the withholding tax and asks us to bear the tax liability. In that case, we ask supplier to make an invoice for Rs. 10,363 (10,000 / (1-0.035=0.965)) to accomodate his (un-lawful)demand.

But in a case where Tax Slabs are as follows;

1 Where the gross amount of rent does not exceed Rs.150,000 Nil
2 Where the gross amount of rent exceeds Rs.150,000 but does not exceed Rs.1,000,000 (10 % of the gross amount exceeding Rs.150,000.)
3 Where the gross amount of rent exceeds Rs. 1,000,000 (Rs. 85,000 + 15% of the gross amount exceeding Rs. 1,000,000.)

What amount should be worked out to bear Tax Liability by the tenant, if the monthly rent is Rs. 15,000/month and 100,000/month respectively.

I am afraid to answer this question. First because it is unclear. Second because it seems to involve an actual business asking us to abet tax evasion. This is, as the OP admits, unlawful.

 

[Deleted member 4993]

I am afraid to answer this question. First because it is unclear. Second because it seems to involve an actual business asking us to abet tax evasion. This is, as the OP admits, unlawful.

I don't think it is unlawful.

Here the tax is included in the price - so that in effect the buyer is paying the tax instead of the seller.

Lot of times, when I got "cash remuneration" from DuPont - it was "taxed-up". So a $ X remuneration - I was paid $ X(1+%) - so that after paying IRS I am left with $X. Lot of time corporate moving expenses are paid this way.

 

[JeffM]

I don't think it is unlawful.

Here the tax is included in the price - so that in effect the buyer is paying the tax instead of the seller.

Lot of times, when I got "cash remuneration" from DuPont - it was "taxed-up". So a $ X remuneration - I was paid $ X(1+%) - so that after paying IRS I am left with $X. Lot of time corporate moving expenses are paid this way.

Yes, but you were paying the tax (and probably periodic estimated tax as well) and are discussing US tax law. The OP implies that the payees are not paying tax, and he explicitly states that what he is doing is unlawful in his country. He should be talking to a lawyer or accountant who knows his country's tax laws. Giving tax advice should be left to experts.