Urgent please help on whether tds to be deucted or not??

This query is : Resolved

Nikhil Agrawalla (Querist)
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03 January 2013 If TDS is not deducted at the time of paying Advance to the party due to TDS exemption certificate, and now at the time of making the final payment TDS is not made at the gross amount, but made at the net amount i.e., after adjusting advance amount, does it results in short deduction of TDS???

Guest

Guest (Expert)

03 January 2013 tds to be deducted while making payment or credit to the party whichever is earlier ,

in your case you have not deducted tds while making advance payment as deductee has exemption certificate,

there is no violation and not a short deduction

Nikhil Agrawalla

Nikhil Agrawalla (Querist)
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03 January 2013 Sir, my view is that, TDS is to be made at the time of payment or credit which ever is earlier, and hence not mandatory to deduct at the time of advance payment. Hence, as there was no requirement to deduct tax at the time of advance and therefore the existence of TDS exemption certificate at that time does not effect the deduction now. Am i correct??

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Guest

Guest (Expert)

03 January 2013 AT THAT TIME DUE TO EXEMPTION CERTIFICATE YOU NEED NOT TO DEDUCT TDS, SO YOU HAVE TO JUST DEDUCT TDS ON BALANCE AMOUNT, I.E. PAID IN NEXT YEAR

Nikhil Agrawalla

Nikhil Agrawalla (Querist)
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03 January 2013 Sir, but is it mandatory to deduct tax at the time of giving advance?

Guest

Guest (Expert)

03 January 2013 advance is what payment

and tds to be deducted payment or credit whichever is earlier

but if at the time of payment you are not liable to pay or deductee has exemption certificate then no need to deduct tds