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Amount of deduction of tds

ANSHUL AGARWAL (STUDENT) (141 Points)

19 June 2012

Dear All,

I have 2 cases:

Case 1: In F.Y. 2010-11 amount paid to a contractor (Company) against his running bill Rs. 1,00,000/- and tds deducted of Rs. 5,000/-.

In F. Y. 2011-12 amount paid to the same contractor against his final bill Rs. 2,00,000/- and tds deducted of Rs. 1,000/-

Case 2: Substitue F.Y. 2010-11 from F.Y. 2011-12

The Assessee says that in totality the tds deducted results in correct rate!

Is the assessee correct? Please quote the relevant provision of the act, if possible.

Thanks

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8 Replies

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 19 June 2012

In case of short / excess deductions, you can adjust with subsequent payments. So in case of payments made within the same FY can be set-off and shown as total deduction against total payments for that year.

But in case of different years, the payments are treated separately. Although, you can still adjust the short deduction from subsequent payment from the excess amount deducted earlier by quoting the Challan No. in the return.

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Patel Dhaval (Audit article) (79 Points)
Replied 19 June 2012

Assessee is correct in its arguments

Jai Kukreja (Finance & Tax Professional) (83 Points)
Replied 19 June 2012

Hi Anshul,

Deductor is in correct at his point , has to rectify his mistake done in FY 2010-11.

(Guest)

No. it is not true in any sense, being over deduction of TDS in FY 2010-11 will Increase deductees Income for that year where as less deduction of TDS in FY 2011-12 will show less income than the bill presented, in my opinion it must be changed accordingly if deductee has any objection.

In my opinion assessee is not true at all, TDS return will not reflect true matter, it will result wrong income will be shown at 26AS of deductee..... hope further the whole matter understood.

Tanvi (Practising CA) (223 Points)
Replied 19 June 2012

Originally posted by : Jalpesh Maniyar
	No. it is not true in any sense, being over deduction of TDS in FY 2010-11 will Increase deductees Income for that year where as less deduction of TDS in FY 2011-12 will show less income than the bill presented, in my opinion it must be changed accordingly if deductee has any objection. In my opinion assessee is not true at all, TDS return will not reflect true matter, it will result wrong income will be shown at 26AS of deductee..... hope further the whole matter understood.

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(Guest)

agree with jalpesh

JAY PARIKH (CA Final) (23 Points)
Replied 19 June 2012

I am not agree with Jalpesh. When Tds return was filled the income on which Tds was deducted was shown Rs. 1,00,000/- and Tds was shown Rs. 5,000/-. It means Tds was deducted at wrong rate at 5% (5000/100000*100) instead of at 2%. so the rate of deduction of Tds was wrong and never the income shown was wrong. The same was reflected in 26AS. So the income was rightly shown in 26AS.

In this case assessee was right he can adjust short deduction of subseqent year (i.e. 2011-12) from excess deduction of earlier year (i.e 2010-11) by quoting challan number in Tds return.

(Guest)

Originally posted by : JAY PARIKH
	I am not agree with Jalpesh. When Tds return was filled the income on which Tds was deducted was shown Rs. 1,00,000/- and Tds was shown Rs. 5,000/-. It means Tds was deducted at wrong rate at 5% (5000/100000*100) instead of at 2%. so the rate of deduction of Tds was wrong and never the income shown was wrong. The same was reflected in 26AS. So the income was rightly shown in 26AS. In this case assessee was right he can adjust short deduction of subseqent year (i.e. 2011-12) from excess deduction of earlier year (i.e 2010-11) by quoting challan number in Tds return.

Dear Jay,

I do not bother for the thing whether you agree with me or not, but I would simply suggest prepare the TDS return of TDS deductor, you will come to know the facts, where excess deduction of TDS department do not bother, whereas in this case when you will show less deduction of TDS, it will generate default of the same. Hope, understood my point of veiw.

Regards