Late deposite of TDS

This query is : Resolved

Prakash (Querist)
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30 July 2009 What will be the penalties when tax deducted on 31st march09 is deposited on 30th July09. Expense on which TDS is deducted shall be allowed during the year or not.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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30 July 2009 Imposition of penalty is a quasi judicial proceeding. It is not automatic. The authorities may refrain from imposing penalty. In isolated cases, no penalty.

Interest has been held to be mandatory. You have to pay interest @ 1% pm.

For TDS deducted in the month of March expenditure is allowed as deduction in the year of deduction, if TDS paid on or before the due date of filing return of income.

Since the TDS has been paid on 30.06.09, the expenditure will be allowed.