shortfall of TDS

This query is : Resolved

Abhishek (Querist)
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23 May 2011 i want to know that expenditure on which short deduct tds . whole expentiture disallow or not.and what if shortfall deposited before return deposited (section 139)

MD. Ibrahim J. Attar

MD. Ibrahim J. Attar (Expert)
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23 May 2011 As per my understanding the Lower TDS is to be made only after the date of the lower TDS certificate received by the Deductor. if short deduction is made then, proportionate expense gets disallowed. Illustration: TDS u/s. 194C @ 2.06% (no SC) for Rs. 10000 = Rs. 206 has to be deducted but deducted at 1.03% Rs. 103 then proportionately i.e (106/206)*100=50% of the expenditure will be disallowed, and Interest will be levied on the Short Deduction under relevant provision.

Via CA Suni.

Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 May 2011 If an assessee deposits the amount of shortfall of TDS on or before the due date of filing return, expenditure will be allowed completely.

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