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Deduction of TDS

Anubhaw Garg (Chartered Accountant in Practice) (101 Points)

01 May 2016

Hi everyone
If a employee is drawing salary of Rs. 75000 per month and his monthly TDs is not deducted instead of that employee makes payment of tds in the month of March for whole amount.
Is it correct or monthly tds needs to be deducted?

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3 Replies

Ruchi (CA) (1410 Points)
Replied 01 May 2016

Monthly tds should have been deducted. But if not deducted then the entire amount should be deducted in march. Interest also applicable on the same.

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Vivek Agarwal (Free Lancer) (6 Points)
Replied 02 May 2016

Hi all,

I have a similar doubt. This is regarding interest U/S 194A.

Should TDS be deducted, deposited and filed when we are PAYING the interest or should it be deducted, deposited and filed every quarter despite whenever the payment is made?

For example: I took a loan of Rs.1 lakh from Mr. X @ an interest rate of 12% P.A. Instead of paying interest every month, I am paying Mr. X the total interest at the end of the Financial Year in Q4. So-

Should I deduct the TDS whenever I pay interest to Mr. X and file TDS for that respective quarter only?

Vikas Gupta (Tax Executive) (530 Points)
Replied 02 May 2016

TDS is always deductible on the basis of DUE or PAYMENT, whichever is earlier (except in case of TDS on salary where TDS is deductible on payment basis). Thus in case of TDS u/s 194A, TDS liability arises at the time when bill/payment becomes due every time.

And If, in your case (Vivek Ji), TDS has been deposited at 4th quarter and bills/payment becomes due in every quarter irrespective of the fact of actual payment, you should deposit TDS along with applicable interest.

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