A is paying rent to B for using his Building for Business purposes. The monthly rent payable is Rs. 5 Lakh. For some reason, A deducts tax of Rs. 40,000/- from the rent payable.
Will the disallowance u/s 40(a)(ia) be attracted in this case on the proportionate amount of Rs. 1,00,000/-?
40(i)(a) speaks about non deduction & non payment of TDS. It does not speak about short deduction of TDS.
Hence expense wont be disallowed
Even I'm of the same opinion as yours but one of my seniors says that there should be proportionate disallowance. So I just wanted a clarification.
No, no proportionate disallowance.
CAclubindia
