We deduct TDS of a party who provides service of more than 5,00,000/- per year. We do business with this party for almost every year and the party is into clearing forwarding business, my question is while deducting TDS (Contractors) should i wait upto Rs. 50,000/- as per rules, or i should go with the likely to be paid principle of TDS which says that if the amount is likely to be paid during the year deduct TDS from the very beginning do not wait for the 20k & 50k slab, I had a talk with my CA about this but he is of a different view he said we should wait & see whether the payment or credit crosses the prescribed limit only then we are supposed to deduct TDS, but i am confused over (Likely to be paid or credited wordings). Please help me
09 July 2010
Agreed, If you know at the begining of financial year that transactions will be cross threshold limit, it is better to deduct tds from begining. But we can't say that your ca view is incorrect. He is also correct.
CAclubindia
