Excess TDS paid - can be adjust in the next year

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Narendran (Querist)
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30 July 2007 Dear sir,

We were paid a sum of Rs.10,000/- to an advocate and by mistake our Accountant deduct TDS 20% instead of 5.1% and we paid the same the deducted amount in the Central Govt.A/c with out verification. but now we found the mistake and we are not in a position to issue TDS certificate for the amount,which we deducted. and at the same time we have paid all our dues under the same head for this current year. now my question is whether we can issue TDS certificate including excess amount? or whether we can adjust that excess amount in the subsequent year dues? Plz.. clarify.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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30 July 2007 I don't have knowledge of the legal provisions on the issue. I would like to share my practical experiance in such a situation.

TDS Certificate including the excess amount can be issued, if your consultant does not have any objection. He can claim the amount shown in the certificate. I had done so, when I mistakenly deducted TDS twice.

The amount can not be adjusted against liability for any other assessment year. The challan are relevant for one particular year only.

I had been advised that the excess amount can be claimed as refund from the department, but the procedure is cumbursome.

I would look forward to more opinion on the query.

CA Mani

CA Mani (Expert)
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31 July 2007 Hi Narendran,

You can issue TDS certificate for excess amount because provisions of IT Act says that TDS certificate is to be issued for "the amount deducted" but not "the amount which could be deducted".

And one more thing, You are issuing TDS certificate means, You are informing the govt abt TDS deducted by you and to be paid to Govt.

Let's take an e.g, where you have deducted lesser amount, There you cannot pay tax from your pocket by issuing cert for what the amount could be.

Please apply this principle here.

So, Proceed by issuing TDS certificate for such actually deducted amount.

Then, You will not have any liability either towards your vendor or towards government.

I hope this would resolve your query.

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CA Mani

CA Mani (Expert)
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02 August 2007 Refer the following Link relating to TDS certificate.

http://law.incometaxindia.gov.in/TaxmannDit/DispCitation/ShowCit.aspx?fn=http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2007ITAct/section203.htm