TDS on Professional charges

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Muralidharan (Querist)
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28 January 2010 Dear Sir

Mr.X raised a bill for Rs.15,000/- on 25.03.2009 on ABC Pvt Ltd. The company had accounted the bill on 30.03.2009. The payment for the bill was made on 15.04.2009.

Mr.X raises a bill for Rs.12,000/- on ABC Pvt Ltd on 10.12.2009.

Kindly advise whether the company has to deduct TDS from both the bill of Mr.X. This question arises due to the fact that eventhough the bills are from two financial years, the payment for the same has been made in one financial year.

with regards

Muralidharan

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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28 January 2010 No, In each year the limit of Rs. 20000/= not crossed. The payee has to consider the limit each year. Date of credit or payment whichever is earlier is liable for tds .

CA Prashant Gupta

CA Prashant Gupta (Expert)
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28 January 2010 Act says that where the amount of such sum or, as the case my be, the aggregate of the amounts of such sums credited or paid or likely to be credited and paid during the F.Y. by the aforsaid person.............
So in your case amount is paid in one F.Y. so if we go exact according to wording TDS should be deducted.
But as per my view it is not Act intention. bill is booked in last year so payment of that should not be added in this year for TDS. because this wording is for one thing credited or paid so we credited in last year now payment of that should not be considered this year. So as per my view NO TDS should be deducted because this year credited or paid is below 20,000/-

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 January 2010 TDS liability will arising when the invoice booking or payment which ever is earlier and your case the bills are booked different financial year the payment you are making for the liability booked for the previous year so no need to deduct the TDS