04 February 2013
In case a company has not deducted TDS on onetime payment of technical fee Rs 41000 in FY 2011-12. now-
Since for onetime vendor payments, TDS from vendors cannot be collected. Therefore, we just disallow them and revise our return - i) What are the penal consequences for non deduction of TDS apart from just disallowance of expense? ii) Will this lead to any deferred tax expense/ income (Asset/ Liability) consequences? iii) Generally what would be more suitable if the TDS cannot be recovered - pay it out of our pocket or just disallow the expense?
04 February 2013
all reply is in one don't take tension. if u didn't collect tax then pay from your pocket (means co pocket) main purpose is to collect tax. I have done it myself. I deposit with interest and no notice or panelty came.
08 February 2013
Penalty for failure to deduction of Tax at Source u/s 271C - a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.
08 February 2013
as CA Suraj said " penaly is equal to TDS" and expense will be disallowed also so as i told first " pay TDS from your pocket (Co pocket)"
08 February 2013
If expense is disallowed, the tax impact would be as high as 30%. And it is more of a question of compliance with the tax laws as a good governance.
CAclubindia
