TDS Rate on Invoice dated April'20 but received in May'20

This query is : Resolved

Abhiz (Querist)
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28 July 2020 Dear All,

Our office closed on March 25th due to COVID 9 pandemic and reopened on 20th May 2020. We have received an invoice on security service which is dated 01/04/2020 (expense for Mar'2020). Usually we are deducting TDS @ 2% under sec 194 C . My query is, new TDS rates which came to effect on 14th May 2020 is applicable on this case?.

Whether we have to deduct 2% or 1.5% ? New rates applicable on the basis of invoice date or invoice received date?

Kindly advise.

Thanks in advance

CA KARAN SINGH

CA KARAN SINGH (Expert)
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28 July 2020 It depends upon the date of the booking expense in the books of accounts. if you book that expenditure on and before 13/05/2020, then the old rate will apply, or if expense booked after 13/05/2020 (usually in the case of cash basis of accounting) then the new rate will apply.