tds on labour contract - not remitted

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2009 In case TDS is deducted from labour sub-contractor but not remitted, then, does the entire payment made to such sub-contractor have to be added back which arriving at taxable income, in case, income is declared under presumptive basis u/s 44AD.

Labour payment is direct payment. Do we have to deduct TDS on direct expenditure also. TDS is to be made only for expenses debited to P/L account and not for expenses debited to Trading account. please give relevatn sections also where I can get property proof of this

Jagdish Narayan Sawant

Jagdish Narayan Sawant (Expert)
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23 November 2009 Dear Sir
44AD is applicable to Eligible assessee engaged in eligible business.
who are eligible assessee?
Eligible assessee are individual, HUF

individual and huf are liable to deduct tds only if the they are required get books of accounts audited under section 44AB during financial year immediately preceding the financial in which such tds deducted.

hence those covered by section 44AD are not required to follow tds provisions, because they are not required to get the books of accounts audited under section 44AB

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2009 but at the time of assessemtnt, addition of such payments was made to declared income, since TDS ought to have been deducted inspite of declainring income on presumptive basis. DO you have any case laws to support this ?

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