25 July 2011
During the audit, i notice one observation. Our client deducted TDS us 194J twice on same invoice and they paid the same. However while filing the Quarterly TDS return, client shown only one payment and they are planning to take balance amount as set off in next quarter. I am not sure but it is not allowable to take advantage of set off and deductee has to bear the same.
I want to know that it is allowed or not and if not then i need reference of the section which touch the observation.
25 July 2011
You are right... Inter-quarterly set off is not allowed.
But, if the payment to the payee is also to be done in the next quarter for a similar amount & the deductor has excess TDS paid under same section, then the IT Department will not object to such adjustment.
25 July 2011
Its not under any section or rule. Its basically the common accepted logic & principle, where an error has been rectified, without any loss to the exchequer.
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