Tds on salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 January 2013 Dear Expert,

While reading the Section 192 - TDS on Salary, Question came to my mind that
1. When TDS to be deducted (Timing - At the time of payment or Accounting Entry whichever is earlier)
2. Time to pay to Government from Date of deduction.
Hoping a good brain storming session ahead on this issue.
Example: February Month Salary is paid on 5th March and Accounting entry is passed on 31st Jan.....What is TDS deduction date and due date of payment to Govt Treasury????

Plz read Section 192 before reaching to any conclusion. Here we are discussing only SALARY and not discussing any thing about perquisites.
Thanks

@VaibhavJ

@VaibhavJ (Expert)
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16 January 2013 Hey,

It is stated in S/ 192 as "Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax".

So TDS need to be deducted in first instance while making payment, even though it is accrued or not.

Further The Tax deducted at source in accordance with the provisions of Chapter XVII-B of the Income tax Act, 1961 by deductors other than an office of the Government shall be paid to the credit of the Central Government-
(i) on or before 30th day of April where the income or amount is credited or paid in the month of March; and
(ii) in any other case, on or before seven days from the end of the month in which the deduction is made; or income tax is due under sub section (1A) of section 192.

So if you are recording entry in 31st Jan 12 but Salary is paid in March 12, TDS to be paid by 30 of April 2012.

Thanks!!

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Querist : Anonymous

Querist : Anonymous (Querist)

16 January 2013 Thanks

If salary is paid on 5th February then???

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@VaibhavJ

@VaibhavJ (Expert)
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16 January 2013 Then 7 th of March 2012 for non govt assessee.

Thanks!!

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2013 I have made some mistake in Example:

January month salary paid on 5th February. Entry is passed on 31st January as accrued expenses towards salary for the month of January.....

Now what is the date of deduction as well date of payment???????

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 January 2013 TDs is deducted at the time of payment i.e. on 5th of Feb and it will be deposited on 7th of March.

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@VaibhavJ

@VaibhavJ (Expert)
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20 January 2013 Hey hi,

Rightly said by Parasji..

Its general industry practice to account for TDS on salary at the end of the month & disburse it on first week of next month & pay TDS by 7 of next month.

Since there is no bar in paying TDS before due date.

I hope your query is cleared.

Thanks for asking such a technical query hope to see you such more query.

Thanks!!

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Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2013 It is irony to say that Many experts in the industry did not interpret this section with true intention and replied that "credit or payment whichever is earlier" while section 192 says about payment date of salary as date of deduction.

I had this knowledge but wanted to confirm in this open session of CCI so I posted this query overhere but i recd only reply from two experts. Hoping that CCI website came out with such solution where we can post query on each experts window so more and more answer can be obtained.

Thanks

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 January 2013 Income Tax Act is having many intricacies and this was one of them. Around 80000 queries have been raised in the Expert Section Only and much more in the Forum.
This shows that the law is not so simple. It can not be abstracted in a single line. Lastly, I appreciate your feelings.

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