TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2010 Dear experts...!!
I have an issue in TDS.. One of our client deducted TDS on contract 194C @ 2.06%. The problem is the deduction made in some months are short deduction and others are excess deduction. But overall TDS deduction works out to more than 2.06%. We have received a notice from IT Dept for short deduction. My question is whether is it allowable under IT Act, to set off short deduction in one month with excess deduction in other month? Under which section? Any case laws regarding this issue..?
Thanking you in advance...
Vignesh.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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04 December 2010 Short deduction of TDS is not allowed in Income Tax. Interest is payable by the payee.

O.D.SHARMA

O.D.SHARMA (Expert)
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04 December 2010 Yes ,Shailesh is right,why short tax was deducted ? why diff.was not paid with intt.No where short tax deduction/deposit will be taken lightly.You pay intt. on that

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Querist : Anonymous

Querist : Anonymous (Querist)

04 December 2010 Thank you sirs..

There is excess deduction for 11 months and in the final month TDS is made to cover overall 2.06%.This month it amounts to short deduction. In this case how can we say that it is short deduction when it covers required deduction of TDS? whether the deductor can deduct more or less than the required rate..?

O.D.SHARMA

O.D.SHARMA (Expert)
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04 December 2010 No,You cannot deduct less or more.There are rates all have to follow.