03 September 2009
hi, My first question is that , Mr X is the prop. in the concern & he is died on 1.11.2008 . the bal stands on tds payable on 31.10.2008 is 83000.00 . what is the due date of deposting the tds in the case of death.. somebody ask me that it is 31.12.2008.( same as 31st march tds on 31st may)..plz guide me to solve dis prob. My second ques is , after the death of mr X his son Y & Z become the partner & makes a partnership firm. from 2.11.2008 onwards.. Mr X takes a unsecured loan from His Son Y & Z amounts to Rs 500000 each & after the death, the Loan A/c of X & Y Tfr to his capital A/c.. my que is that wheather we consider this transfer entry from loan a/c to capital a/c is repayment of loan u/s 269 t & same is reported in audit report or not.. Thanks in Advance..
27 July 2024
### **1. TDS Payable Due Date After the Death of Mr. X**
#### **Background:** Mr. X was a sole proprietor and passed away on 1st November 2008. The TDS payable balance as of 31st October 2008 is ₹83,000. The question is about the due date for depositing this TDS after Mr. X's death.
#### **Due Date for Depositing TDS:**
- **Normal Due Dates for TDS Payments:** - For TDS deducted in the month of March, the due date for payment is 31st May of the financial year. - For other months, the due date is within 7 days of the end of the month in which TDS was deducted.
- **Special Consideration in Case of Death:** - In case of the death of the proprietor, the legal heirs or the person managing the estate of the deceased are responsible for settling the TDS liabilities. - The due date for payment of TDS remains unchanged regardless of the death of the individual. The same deadlines apply as if the proprietor was alive. - **For the TDS payable for October 2008**, the due date for payment would be 7th November 2008. Since Mr. X died on 1st November, it would be advisable to make the payment as soon as possible.
Therefore, the due date for depositing the TDS for the period ending October 2008 is 7th November 2008, not 31st December 2008. It is crucial to make the payment promptly to avoid interest and penalties.
### **2. Transfer of Loan to Capital Account After Death**
#### **Background:** After Mr. X's death, his son Y and Z became partners and formed a partnership firm from 2nd November 2008. Mr. X had an unsecured loan from his sons Y and Z amounting to ₹5,00,000 each, which was transferred to his capital account posthumously.
#### **Treatment of the Transfer Entry:**
- **Transfer of Loan to Capital Account:** - **Loan Repayment Consideration:** - The transfer of a loan amount to a capital account is not considered repayment of the loan for the purposes of section 269T of the Income Tax Act. - Section 269T deals with the prohibition on repayment of loans and deposits in cash, and such a transfer from a loan account to a capital account is not covered under this section. - This transfer does not constitute repayment of a loan but rather an adjustment of the outstanding liability.
- **Reporting in Audit Report:** - **Audit Report Requirements:** - The transfer of loans to capital accounts after the death of the proprietor should be reported accurately in the financial statements of the partnership firm. - Ensure that the transaction is properly documented, and the rationale for the transfer is clearly stated. - It is important to disclose this transaction in the partnership firm’s financial statements and possibly in the auditor’s report, ensuring transparency and compliance with accounting standards.
- **Compliance with Other Provisions:** - Make sure to comply with any other relevant provisions of the Income Tax Act and Partnership Act concerning the transfer of assets and liabilities.
### **Summary**
1. **TDS Payable Due Date:** The due date for depositing TDS for October 2008 is 7th November 2008. Ensure timely payment to avoid interest and penalties.
2. **Transfer of Loan to Capital Account:** - The transfer from a loan account to a capital account is not considered a repayment of the loan under section 269T. - This transfer should be reported accurately in the financial statements and audited reports of the partnership firm.
Feel free to reach out for further clarification or if you need additional assistance.
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