TDS on Salary-When salary becomes due?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2011 Dear Sir,

I have a question regarding salary in a big company.

Here payroll processing is completed on a 10th to 15th of next month many a times. So they deduct TDS on that day. They have to pay interest on TDS which is big amount. So If we make accounting entry of salary of a particular month on the 1st day of next month then we will not be required to pay Interest on TDS.
For example:
If for the month of January, we make entry on 31st january and pay TDS on 10-15th of February, we have to pay interest. But if we make entry on 1st February then we can make TDS payment upto 7th March. So we will not be required to pay TDS interest.
The concept behind it is that Our salary becomes due on 1st day of next month.

So i want to know whether there can be any problem if we follow this kind of practice and whether there is any case law regarding this matter.

Pls tell me.

Thanx to all of you.

Guest

Guest (Expert)

20 February 2011 No problem at all.

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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22 February 2011 Hi,
Agree with Expert

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITR Hons

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Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 Sir,
Can you please provide me any specific case law regarding this matter?
Thank You.

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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23 February 2011 Hi,

Its a Concept based on method of Accounting.

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITR Hons

Guest

Guest (Expert)

23 February 2011 Do you have any contrary case?

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 No Sir,
I dont have any contrary case but I was just asking for it because we can have one basis for implementing such practice.

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 Thank You very much to all of you for helping me.

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CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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23 February 2011 Hi,

All the Best for the Implementation.

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2011 Dear Sir,
If I follow above practice then also for the month of March, I have to follow accrual system. If I do not follow accrual system for the month of March then employees will not get correct credit of TDS for the financial year as per form 26AS.

At the same time, If I follow accrual system for the month of March then in TDS return for the 1st quarter of the year, there will be salary for only two months, that is, April and May. and in case of 4th quarter, there will be salary of 4 months: December, January, February, March.

So please tell me there can be any problem in TDS return.

Thank You.