Audit fees provision

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 September 2014 I just want to know about TDS paybale for Audit fees provision made.

We are given the audit fees invoice only in September.
Is TDS to be paid for previous year which will attract penalty or current year.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2014 It is only provision for expenses made not a liability created for services rendered. Hence TDS liability is only during September in current year. No penalty will be attracted.

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AJAY KUMAR

AJAY KUMAR (Expert)
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19 September 2014 sec 194J : tax should be deducted at the time of credit of such sum to the account of the payee or at the time of payment whichever is earlier . if you make a provision of audit fee (exceeding prescribed limit >30,000) you will have to deduct the TDS @ 10% because it treat deemed to credit of account. if tds do not paid up to 30.09 then it is the case of disallowance u/s 40(a)(i)

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Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2014 Thank you for your inputs.

My accountant informs that since mercantile accounting is followed,auditor's fees provision TDS has to be paid for 2013-2014 and not the current year even though the invoice is generated and payment is made only in Sept. He also claims that TDS paid now for Auditor fees will attract interest and not penalty. Can you pls advice

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 September 2014 Your accountant has to differentiate between provision and liability for work done.
Audit work done in August/September, invoice raised and payment made in September for that no interest will be attracted.

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