A company deducts TDS from contractors every month but the remittance to govt is made on march(last month of the year). Will it be disallowed by reason of late paymnet.
18 Replies
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 29 December 2009
TDS for the period from Apr to Feb can be paid in the month of march alongwith the interest for the late payment. Payment of TDS in march will not amount to diallowance of any expenditure incurred in the month of apr to feb.
TDS for the month of march shall be deposited on or before the due date of filing return u/s 139 i.e 31st july for asessee to whom tax audit is not applicable and 30th sep for whom the tax audit is applicable.
CA Anand Oberoi
(Chartered Accountant)
(296 Points)
Replied 29 December 2009
agreed to Fatema word by word. :)
shailendra
(C.A. FINAL)
(189 Points)
Replied 29 December 2009
The amendment mentioned by Fatema came in Finance Act 2008
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 30 December 2009
as per section 40(a)(1a), if tax has been deducted at source upto last of february of previous year, tds amount should be paid till 31\3 of relavent previous year .if tax has been deducted at source in the month of march of relavant previous year it should be paid till tha last date of filling of return of income . so all expenditure is allowed. but u have to deposited intt. in case of late deposited of tds amount with the govt.
Ladi.Govinda.Rao
(Manage Finance/ Dr Reddy Labs)
(38 Points)
Replied 30 December 2009
I agree with Fatima. But i have small doubt. If TDS is paid without interest. In this situation also expenditure allowed for deduction?.
CA Anand Oberoi
(Chartered Accountant)
(296 Points)
Replied 30 December 2009
yes... if tds is paid without interest, even then expenditure is allowed. this point will be shown in form 3CD while reporting tax audit.
ca tarun sharma
(SERVICE)
(277 Points)
Replied 30 December 2009
hello narendra for claiming deduction of exp tds should be deductible & deducted in march not only deducted if liable to be deducted before march when tds is deposited before due date of return u/s 139(1)
Bharat Khurana
(Student)
(153 Points)
Replied 30 December 2009
expenses shall be allowed if tds is deposited by the end of the previous year in respect of deduction made on any bill credited
during the year. However, he will have to pay interest for late deposit of tds
CA. Anshul Bajaj
(Taxation Head)
(173 Points)
Replied 31 December 2009
Absolutely Correct...thanks Fatema
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