TDS Rate Chage effect
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 August 2010
Mr. X is the Contractor providing construction services at our Company on Contract basis.
The rate of TDS has changed from 1.10.2009 (From 2.06% to 1%)
Example:
Advance Payment before 30.09.2009
Gross Payment: 15 Lacs
Less: TDS @2.06%: 30,900/-
Net: 1469100/-
Bill recd from Mr. X on 25.03.2010 of Rs. 55,00,000/- (For the whole year)
Options:
(a) Total TDS for the year 55,000
2500000*1%
Less: TDS already deducted 30,900
Further TDS 24100
(b) TDS at 2.06% 30,900/-
TDS at 1% 40,000/-
(55 Lacs - 15 Lacs)*1%
Total TDS: 70,900/-
My Query is if we have done as option (a) then what will the applications as far as disallowance of Expenses under Income tax is concerned
What argument we can give to officer if he says that proportionate disallowance for the short payment.
The rate of TDS has changed from 1.10.2009 (From 2.06% to 1%)
Example:
Advance Payment before 30.09.2009
Gross Payment: 15 Lacs
Less: TDS @2.06%: 30,900/-
Net: 1469100/-
Bill recd from Mr. X on 25.03.2010 of Rs. 55,00,000/- (For the whole year)
Options:
(a) Total TDS for the year 55,000
2500000*1%
Less: TDS already deducted 30,900
Further TDS 24100
(b) TDS at 2.06% 30,900/-
TDS at 1% 40,000/-
(55 Lacs - 15 Lacs)*1%
Total TDS: 70,900/-
My Query is if we have done as option (a) then what will the applications as far as disallowance of Expenses under Income tax is concerned
What argument we can give to officer if he says that proportionate disallowance for the short payment.
23 August 2010
option b) is correct as TDS is applicable at the time of credit or payment whichever is earlier, therefore, on 15lac, higher rate of TDS shall be applicable.
03 October 2021
Whatever amount paid or credited on or before 30.09.2009, is liable for higher TDS rate. Bill cannot be issued combined for whole year.
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