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Applicability of TDS

FATEMA (CHARTERED ACCOUNTANT) (719 Points)

18 September 2010

My client has been provided professional services by an architect for which he has paid fees more than Rs 20,000/-.He has not deducted TDS.Professional Fees has been capitalised as it was for the building that was being constructed,Whether TDS is applicable?

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7 Replies

Member (Management) (325 Points)
Replied 18 September 2010

Capitalization or otherwise may will have any effect on TDS. May be 40(a)(ia) provisions will not be attracted, since the expense has been capitalized, but Section 201 will be attracted.

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madhur gupta (student/article ) (1022 Points)
Replied 18 September 2010

yaa

TDS had to be deducted on it.

there are 2 sec for deducting TDS.under PGBP although you are not claiming expenses but still you will be liable for default in non dedction of TDS under TDS relevant provisions sec194

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 18 September 2010

DEAR FATEMA,

TDS PROVISIONS WOULD GET ATTRACTED ONLY WHEN THE RELEVANT EXPENDITURE IS OF THE REVENUE NATURE AND NOT OF THE CAPITAL NATURE. THUS, IN THE GIVEN CASE, NO DISALLOWANCE U/S 40(a)(ia) AS U CAPITALISES A RELEVENT EXPENDITURE.

REGARDS,

MANOJ

vikash rathi (Chartered Accountant) (787 Points)
Replied 18 September 2010

ofcourse tds will be applicable.................no where in sec 194 to 206 it is written about that payment ma\ust be made for capital nature or revenue nature u have to deduct tds other wise there will be reporting in 3cd for this n ....A.O. can disallow u r deprecitation exp for that asset..................

@ manoj ..............u r tottaly wrong bro..........