22 July 2009
Sir I PAID A PART OF RS8000 IN THE MONTH OF APRIL. SO THERE IS NO TDS . BUT I PAID THE SAME PARY 60000 IN THE MONTH OF FEB. NOW THE QUESTION IS SHOULD I DEDUCT TDS OF WHOLE AMOUNT THAT IS RS 68000? IF YES SHOULD I PAY INTEREST? THE PERCENTAGE COLUMN IN ETDS FORM WILL BE CALCULATED ON RS 68000 0R RS60000.
22 July 2009
TDS is not deducted on the basis of the month in which payment is made. It is deducted on the basis of the expenses incurred.
First Case - If in April the whole amount of Rs. 68,000/- was incurred while payment of Rs. 8,000/- was made then you should have deducted the TDS on full amount at that time only.
Second Case - However, if during that period only bills of Rs. 8,000/- was received and no other bill was due then no TDS has to be deucted at that moment of time. Now, when you had another contract executed by the same contractor in Feb. and the amount has exceeded the limit of sec. 194C then you have to deduct TDS on the whole amount i.e. Rs. 68,000/-.
Conclusion - No interest in the second case has to be paid as you were not aware of occuring of the second bill while the booking of the first bill was made. But however, if the situation contains that as described by me in the first case then interest fro late deposit of TDS have to be paid.
CAclubindia
