TDS
This query is : Resolved
01 April 2009
If TDS has not been deducted on Rent,what is proceeding to me, and whether that rent will be allowed exp u/s 40a(ia)?
01 April 2009
if you had to pay by cheque and a proper registered rent Agrement, then you can claim, but TDS should be deduct.
01 April 2009
If TDS is not deducted in the previous year (suppose 2008-09)then this expense will not be allowed as an expense.
If you deposit TDS (suppose in FY 2009-10) for the FY 2008-09 then you can claim the expense in the FY 2009-10
If you deposit TDS (suppose in FY 2009-10) for the FY 2008-09 then you can claim the expense in the FY 2009-10
01 April 2009
yes rent will be disallowed as tds is not deducted
01 April 2009
Rent will be disallowed if TDS is not deducted.
03 April 2009
Section 201 of the Income-Tax Act 1961 deals with failure to deduct tax at source or failure to deposit such TDS in government account. TDS has to be paid into government account within the prescribed time.
Section 201 treats a person failing to do so as an assessee in default. Courts have held that if the person who has received the payment without TDS had already paid the tax on the amount, then there can be no liability on the part of the deductor for interest on the amount which should have been deducted.
There can be no question of double recovery, both from the person responsible for deduction and from the person who has received the payment without TDS.
Section 201 treats a person failing to do so as an assessee in default. Courts have held that if the person who has received the payment without TDS had already paid the tax on the amount, then there can be no liability on the part of the deductor for interest on the amount which should have been deducted.
There can be no question of double recovery, both from the person responsible for deduction and from the person who has received the payment without TDS.
03 April 2009
The Central Board of Direct Taxes, in Circular No. 275/201/94-IT (B) of January 29, 1997, had declared that no demand visualised under Section 201 of the Act should be enforced after the tax deductor has satisfied the department that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under Section 201 (1A) till the date of payment of taxes by the deductee-assessee or the liability for penalty under Section 271 C of the Act.
This Circular was referred to by the Supreme Court in Hindustan Cococola Beverage (P) Ltd vs CIT (293 ITR 226). It was held that if the deductee had paid the tax, there can be no question of recovering the same once again from the deductor.
Judicial controversy arose with regard to liability for tax/interest on the person responsible for TDS in cases covered by payments by the deductee. The Finance Act, 2008 has amended both Sections 201 and 191.
This Circular was referred to by the Supreme Court in Hindustan Cococola Beverage (P) Ltd vs CIT (293 ITR 226). It was held that if the deductee had paid the tax, there can be no question of recovering the same once again from the deductor.
Judicial controversy arose with regard to liability for tax/interest on the person responsible for TDS in cases covered by payments by the deductee. The Finance Act, 2008 has amended both Sections 201 and 191.
03 April 2009
THE AMENDMENT
It is clarified that where a person does not deduct tax or, after so deducting, fails to pay the same into government account, he will be deemed a defaulter.
There will be a liability both for interest and penalty. To enlarge the scope for TDS, the amendment includes Association of Persons (AoP) and Body of Individuals (BoI) as persons responsible for TDS under Section 194C covering payments to contractors and sub-contractors.
It is clarified that where a person does not deduct tax or, after so deducting, fails to pay the same into government account, he will be deemed a defaulter.
There will be a liability both for interest and penalty. To enlarge the scope for TDS, the amendment includes Association of Persons (AoP) and Body of Individuals (BoI) as persons responsible for TDS under Section 194C covering payments to contractors and sub-contractors.
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