02 June 2008
Expert Shekhar and Shyam both gave opposite answer to my Q with regards to deduction of TDS on Capital expenditure and ravenue exp.
to clarify my doubt more further Capital expenditure from my side will be revenue income for other SO does deduction of TDS required on capital exp amount ?
02 June 2008
TDS to be deducted only on revenue expenditure..when u say "Tds to be deducted on expenditure forming part of other persons income "......it means to say Revenue reciept not capital reciept to tht person...
02 June 2008
IF you can bifurcate ur exp into revenue and capital than TDS wl be deducted on revenue expenditure BUT if amount is paid in total than TDS wl be deducted on total amount even it includes capital expenditure as well
03 June 2008
LET US TAKE AN EXAMPLE OF SECTION 194C. IT SAYS:
[Payments to contractors and sub-contractors.
SECCTION 194C[(1)" Any person responsible for paying any sum to any resident (hereinafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and ........................................................."
FROM THE READING ABOVE IT WILL BE CLEAR THAT THE CLASSIFICATION OF EXP INTO CAPITAL AND REVENUE EXPENDITURE IS NOT RELEVANT FOR MAKING TDS.
IF TDS IS TO BE MADE ON ANY PAYMENT .........THE FACT THAT PAYEMNT IS FOR CAPITAL EXPENDITURE WILL NOT CEASE THE LIABILITY OF TDS
This classifcation may be relevant for disallowance of busines expenditure for non TDS or non payemnt of TDS etc. Becasuse capital expenditure can not be disallowed and added back as income.
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