24 March 2010
A co. is crediting in his books salary and rent to its director on 31.3.2010. It is also paying the contract amount to a contractor on 31.03.2010 after deducting TDS. But due to shortage of funds, it would not not be possible to deposit the TDS in time. But it will pay the same along with interest before the due date of filing ITR. It is OK ??? Can the expenses be disallowed on the ground that TDS is not paid in time.
Also, it makes any difference, if the amount is paid/credited in any other date of march.
24 March 2010
So far TDS on salary is concerned, the disallowance provision is not attracted. Expenses will be allowed, whether or not TDS deducted, Paid etc.
In respect of Rent & Contract, expenses will be allowed, if the TDS is deposited before the due date of filing return of Income.
It does not make any difference, so far allowability of the expenditure is concerned, if the amount is paid/credited on any day in the month of March.
Further, there is a proposal in the Finance Bill,2010 to the effect that, TDS deducted at any time during the previous year(Apr-Mar) and paid before the due date of filing return of income, the expenses will be allowed in the year of deduction.
The above provision is applicable for the AY 2010-11 onwards.
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