Tds at higher rate

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2015 Dear Sir
Is it possible to deduct 100% TDS on payment made to some person.

Example:194J
Normal: Bill Amount = Rs 100
PAy Rs 90 to person
PAy Rs 10 to govenrment as TDS

My case: Bill Amount = Rs 100
PAy Rs 0 to person
PAy Rs 100 to govenrment as TDS

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 February 2015 Why you want to deduct 100% TDS? There is no 100% TDS Rate.

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2015 From your illustrated example, It seems you want to irritate your consultant.
Please note TDS rates are minimum rates for admissibility of that particular expense. Hence if you deduct less TDS then prescribed then proportionate expenses will be allowed as deduction and not the entire expense. If you deduct TDS equal to prescribed rates then entire expenses will be allowed as deduction. However if you deduct more then prescribe rates then still entire expense will be allowed as deduction.
Hence even 100% tax deduction is possible, however in case of 100% tax deduction you will encounter procedural difficulties as TDS return will accept TDS rates only upto two digits, so in such case you can only put 99% tax rates in your TDS return.
So in above case you have to pay 1% of bill amount to your consultant.
Alternatively you can increase the amount payable so that 99% become equal to bill amount of the consultant, but in such case you will be liable for false information in your TDS return.
So I will suggest you to pay 1% to your consultant and pay 99% to the department.

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