tax on provision

This query is : Resolved

Parag Behede (Querist)
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18 June 2010 Whether TDS is to be deducted on provisions made during preparation of intrim financial reports ?? These provisions are subsequently revered in next month .... still TDS has to be deducted ??

deepak K Gujrati

deepak K Gujrati (Expert)
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18 June 2010 Please clarify the query. While preparing the intrim financial statements, provisions are made for expenses which are actually liable to be made. These can not be reversed. However certain provisions like Depreciation etc if made on periodical basis can be reversed. So When there is actual liability to make payment, TDS has to be deducted.

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Parag Behede

Parag Behede (Querist)
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21 June 2010 If provision are made on adhoc basis... ie without any bill or documentary proof...whether TDS to be deducted ?? and i also want suggestion whether TDS has to be deducted if provision made without crediting to creditors/party A/c... is there any reference of case laws....

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