tax deducted at source

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SHARAD THAWALI (Querist)
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19 February 2009 my query is relating to income tax deducted at source . suppose a company has deducted tax at source and failed to deposit in GOVT TREASURY BY 30 TH SEPT(BEING LAST DATE TO FILE I.TAX RETURN ?WILL ALL EXPENDITURE ON WHICH TDS HAS BEEN DEDUCTED BUT NOT DEPOSITED IN GOVT TRASURY WILL BE DISALLOWED? FURTHER
WHAT IS THE TIME LIMIT TO DEPOSIT TDS WHICH HAS BEEN DEDUCTED IN ORDER TO ALLOWABILITY?

Ronak Desai

Ronak Desai (Expert)
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19 February 2009 Section 40(a) clearly disallows the amount of expenditure incurred on which TDS has not been made, has been made but not deposited to the credit of CG within the due date specified for deposit, proportionately deducted or deducted and partially deposited. In the last two cases, the amount of expenditure disallowed will be in proportion of TDS short-deducted or short-deposited.
Now even the credit for expenditure shall not be disallowed when the TDS made is deposited after the due date but before the date of filing of return of income.

so, in order to get the amount of expenditure allowed, one has to deposit the TDS before filing of return of income.