TDS

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M.R.KANNAN

M.R.KANNAN (Querist)
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04 June 2009 A company availed professional service from Mr. X for which it received a bill for Rs.50,000 in July, 2008. It omitted to account it in July, 08 and also payment was not made till March, 09 to Mr. X. The omission was realised only in March, o9. In March, 09, it accounts the bill and also makes the payment to Mr. X. TDS was also deducted in March, 09, while accounting the bill, but the relevant tds is being paid only in June, 09. If tds is paid in June, 09, will the expenditure be allowable for Ay 2009-10, or disallowable u/s 40(a)(ia)[as amended by FA 2008]?

chetan soni

chetan soni (Expert)
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04 June 2009 In Case if the bill is accounted on 31St March 09, then the last date of payment will be 31st May for the purpose of Chapter XVIIB.

But as per sec 40(a)(ia) this needs to be paid before the due date of return filling.
In your case the expenses will be allowed.

But as you said you have booked the expenses in march 09 say before 31St march then the last date of payment will be before the end of f.y. i.e 31-st March 09.

Just a additional care, the the letter from the vendor that he has delivered the bill on 31st March & hence you have booked the same on 31st March. This will save you from non complaince of TDS provisions also saving the interest on delayed payment of tds (if this would have been booked in June-08) & expenses allowed for this F.Y.