14 November 2010
Mr. X started his Profession in A.Y 08-09 and has gross receipts of Rs. 60 Lacs in the first year. He paid Rs. 75000 to a contractor is he liable to deduct TDS on the same? And if his (Mr. X) gross receipts in the 2nd year are Rs. 6 Lacs and he has paid Rs. 38000 to a contractor, then is he liable to deduct TDS and get his accounts audited u/s 44AB of the IT Act, 1961?
15 November 2010
Every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year get his accounts of such previous year.
Mr. X is liable to deduct TDS on Rs. 75,000 in first year.
In the 2nd year, Mr. X is not requires to get his account audited, Similarly, he is liable to deduct TDS on Rs. 38,000.
If he is not deducted, he will be defaulter under the prov. of IT act.
15 November 2010
See, here two things are important one is whether he comes under tax audit and the second one is TDS. To answer first part you need to get your books audited as u/s sec44AB as you are crossing the limit in the first year. If you are fall under the category of sec 44AB in one year and it will even continue for next year unless there is any change in the ceiling of exemption limits. Second, TDS is deducted from contractor irrespective of you are attracted u/s 44AB or not. since, if your are already registered as a professional then you need to deduct TDS from contractor if total payment to him exceeds Rs.30000(Sec 194C)
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