Tds
This query is : Resolved
09 June 2012
If there is concept of grossing up then TDS deducted by a person who receives services and also TDS deposited by same person and not by service provider.
My question is if I am service receiver then i take credit of TDS which is paid by me on behalf of service provider. Because sevice provider recieving full amount of his service and though he take credit of TDS which is not paid or deposited by him to the department.
For Ex. If 'A' provides service to 'B' and raised invoice of Rs. 40,000. Now as per agreement 'B' has to make full payment of Rs. 40,000 to 'A' without deducting TDS. So 'B' deduct TDS after doing reverse calculation on Rs. 40,000 and also deposit it in TDS Department. Now whether 'B' can take credit of that TDS which is paid by him?
My question is if I am service receiver then i take credit of TDS which is paid by me on behalf of service provider. Because sevice provider recieving full amount of his service and though he take credit of TDS which is not paid or deposited by him to the department.
For Ex. If 'A' provides service to 'B' and raised invoice of Rs. 40,000. Now as per agreement 'B' has to make full payment of Rs. 40,000 to 'A' without deducting TDS. So 'B' deduct TDS after doing reverse calculation on Rs. 40,000 and also deposit it in TDS Department. Now whether 'B' can take credit of that TDS which is paid by him?
11 June 2012
The amount will be grossed up and the grossed up amount shall be claimed as an expense.
Let us suppose that in the above example TDS is 10%.
Gross amount will be Rs. 44,444. You will be allowed a deduction of Rs. 44,444.
Further, Rs. 44,444 shall be the total income of the service provider. The services provider is eligible to claim credit of TDS and not the service recipient.
The service recipient has borne the TDS amount for which he will be allowed a deduction.
Let us suppose that in the above example TDS is 10%.
Gross amount will be Rs. 44,444. You will be allowed a deduction of Rs. 44,444.
Further, Rs. 44,444 shall be the total income of the service provider. The services provider is eligible to claim credit of TDS and not the service recipient.
The service recipient has borne the TDS amount for which he will be allowed a deduction.
11 June 2012
You cannot make an agreement which is against the law. Secondly, in case you make such arrangements the TDS is to be borne by you and the credit of the same will be taken by the service provider and in no case you can take the credit. And in case you failed to deduct TDS then the expenditure will not be allowed under Income Tax.
If you go by the above example given by the expert you will be at loss, the reason is you can take benefit of 30% if you are in that bracket on 4444 but you need to deposit Rs. 4444 so you will be at loss for Rs.(4444-4444*30%).
The better option is to deduct 4000 from 40000 and deposit it to the government. He will take the credit on his tax payments.
If you go by the above example given by the expert you will be at loss, the reason is you can take benefit of 30% if you are in that bracket on 4444 but you need to deposit Rs. 4444 so you will be at loss for Rs.(4444-4444*30%).
The better option is to deduct 4000 from 40000 and deposit it to the government. He will take the credit on his tax payments.
16 June 2012
In your example Mr. Siddhartha, what will be the gross amount of invoice?? I mean invoice value should be Rs. 40,000 or Rs. 44,444???
17 June 2012
Although the invoice will be for Rs. 40,000, the expense will be booked for Rs. 44,444.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- TDS deduction (debit notes)
- Can a partnership firm become partner in a LLP ?
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- TDS on purchase of value vouchers for employees ?
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
