10 August 2017
If there is no TDS in a quarter is it necessary to file Nil TDS Return for that quarter. Is it mandatory to pay salary or make provision on the last working of a month? Interest on TDS has to be calculated from the date of deduction or date of credit. Most of the traders use to pay salary only by the 1st week of the subsequent month. Only in March Provision for salary payment will be made and TDS credited. One NSDL facilitator says every month salary to be paid or provision to be made. If provision made TDS will be credited. As per his words belated interest has to be calculated from the last working day of the month.He made us to pay interest for one month where as we paid salary after tax deduction by 5th of May and June 2017 for April & May 2017 and TDS remitted on 07.07.17
11 August 2017
1. If there is no TDS in a quarter, it is not necessary to file Nil TDS Return for that quarter.
2. It is not mandatory to make payment or provision of salary on last working day of the month. However, from an accounting stand point, in order to match the costs it would be correct to account salary payable in the month for which services were rendered. Salary is taxable in the hand of the employee on accrual basis as Section 15 has the lines "any salary due ......whether paid or not" However, TDS on salary is governed by Section 192 which has the lines "Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income tax. Hence, there appears to be a lacuna in the charging section and the section dealing with TDS on salaries. If you note, all other TDS Sections other than salary clearly state that tax is to be deducted at the time of payment or credit whichever is earlier, whereas in salary it uses the term "payment" only and does not allude to tax being deductible at the time of credit in books. Hence, even if provision is made, one can take a view that no tax is deductible on the same in line with the above discussion.
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