Reg. tds on march clo. interest on secured loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2014 Please help me in accounting treatment of Provision of Interest as on 31st Mar, 2014 on Interest on Secured Loan from FI.

Also note that in Acct. St. of FI EMI for March month due on 5th April.

My Concern is that:
(i) Whether we need to create provision for March month?

(ii) If yes, does any requirement to deduct TDS on it?

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 June 2014 i)Provision for March has to be created.
ii)If TDS is made in April and remitted in April on the provision, there is no need to deduct TDS on provision made in March.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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06 June 2014 have to disagree...the tds is to be deducted on 31 March itself.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 June 2014 please refer the notification No 41/2010. Whether payment made in March or liability created in March TDS can be remitted on or before 30th April. For March provision deducting TDS in April 5th while making payment and remitting TDS before 30th April is in order.

Ganeshbabu K

Ganeshbabu K (Expert)
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06 June 2014 Please refer the Notification again

Effect of this notification is only on deposit of TDS deducted in March month and it has nothing to do with time of deduction of TDS for provisions in March month
.
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Due to this Notification a relaxation has been provided for the tax deducted at the end of the financial year i.e, in the month of March wherein tax could be deposited on or before 30th April in stead of with 7 days of following month(i.e,7th April)
.
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So,
No doubt you can deposit TDS deducted in March month up to 30th April.
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But note that to claim it is expenditure in previous year it should have been deducted in the March month and not it April month.
.
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and this tds should included in Jan-March quarter TDS return for deductee.
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Hence with out any doubt i can say to claim provision for expence as expence one should deduct tds on provision amount in March month.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 June 2014 If TDS is made and remitted on or before 30th April for the provision made in March. Dis allowance provisions of Income Tax Act for provision for expense will not be attracted.