Darshan Bhutwala (Proprietor) (81 Points)
03 July 2010Hi everyone,
I would like to know Income Tax provisions in the following matter.
An individual has received a brokerage of 1 lac from a firm -[partnership] during FY 2009-10 which was the first year of operations for the firm for acquiring a property for business. The Firm did not deduct TDS under the pretext that it was its first year of operations . Under what provisions of the Income Tax Act is this permissible?
Please guide me on this....
Amir
(Learner)
(4016 Points)
Replied 03 July 2010
Darshan Bhutwala
(Proprietor)
(81 Points)
Replied 06 July 2010
Dear All,
Is it possible that the firm has capitalised the brokerage and hence not deducted TDS? are the provisions of TDS guiding only to expenses or is it specific to payments irrespective of their accounting treatments?
Amir
(Learner)
(4016 Points)
Replied 06 July 2010
Dear Sir,
You are right, TDS provisions are specific to payments irrespective of their accounting treatments.
If you read the provisions you will find that the section has used the term "payment", which covers all type of expenditures whether revenue or capital.
Manivannan.C
(article clerk - CA pcc 1st grp cleared)
(80 Points)
Replied 09 July 2010
As it is an individual ,TDS Has to be deducted only if individual's Gross receipts exceeds 40,00,000/-,
Is that individual is covered under tax audit.?
Darshan Bhutwala
(Proprietor)
(81 Points)
Replied 10 July 2010
the receiver of brokerage income is individual not having gross receipts exceeding 40 lacs... but the payor is firm where no such limits have been specified.. Does it really matter in any provisions whether the receiver is covered under Tax Audit for deductions of TDS? it is usually for deductor individuals where such limit has to be reckoned...
CAclubindia
