Taxes borne by Employer on behalf of employees
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 October 2010
TDS payable on salary of some employees is borne by employer, as per employment agreement with the employee, and tds payable is added to salary of employee for grossing up salary and tds on grossed up salary(including tds on taxable salary)is paid by the employer. Is TDS paid by employer an allowable expenditure while computing business income.
Please reply with supporing provisions of the income tax act and will appreciate if somebody can reply asap.
Please reply with supporing provisions of the income tax act and will appreciate if somebody can reply asap.
12 October 2010
Not a business expenditure meaning thereby that such tax will be disallowed in the hands of the employer by virtue of section 40 (a)(v) of the Income tax Act,1961.
12 October 2010
Dear BC Sir,
This view is not agreeable that the TDS borne by employer is not a buiness expenditure. Under a contratual agreement the TDS borne by the employer becomes the expenditure / cost in the hands of the employer and is fully tax deductible. Take anothe example, if one has to make payment to a consultant net of taxes, then grossing up cost is also added to consulatancy charges. The consulatancy charges are will be booked at the higher amount which actully becomes my cost. Will this not be allowed?
This view is not agreeable that the TDS borne by employer is not a buiness expenditure. Under a contratual agreement the TDS borne by the employer becomes the expenditure / cost in the hands of the employer and is fully tax deductible. Take anothe example, if one has to make payment to a consultant net of taxes, then grossing up cost is also added to consulatancy charges. The consulatancy charges are will be booked at the higher amount which actully becomes my cost. Will this not be allowed?
12 October 2010
My observation is as per section 40(a)(v) read along with 10 (10CC) of the Income tax Act,1961. You have the right to agree or not to agree. If you do not agree, as you know, face the consequences or contest before a court of law.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- TDS U/S. 194NF
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- Should I report my US salary for January, February, March in Schedule FA?
- Tds on building rent monthly
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
