Shobhit Singhee (CA Job) (93 Points)
28 July 2008Hi all,
I have a confusion with interest on tds.I know its 1% per month but my question is that whether it should be booked in the year in which dere is a default or in the next year when pay off them.should i make a provision of this in my 31st march,2008 books & i have paid my interest in the month of july,08.
Please help me with this.
Thanks & Regards,
Shobhit Singhee
Rashmi Agrawal
(Accountant)
(275 Points)
Replied 28 July 2008
Hello Shobhit!!
I think the intrest on TDS should be booked in the year when there is a default. The provision for the same should be made in the same year i.e. 31st March 2008.
Others Views are Welcomed
Regards
Rashmi
Ramakrishna
(Financial Executive)
(438 Points)
Replied 28 July 2008
Hi friends!!
The accountability of the interest on TDS would come only when it is an allowable expenditure within the Income Tax Law.
You should note that the interest u/s. 201(1A) on TDS payments arise because of the fact that the taxes are not properly deducted or after deducting have not been remitted the Government's A.c in time. It is a case of statutory vioation and the interest itself is of a penal nature.
Therefore, I stromgly feel that it is not an allowable expenditure.
The deductor has to simply absorp the same in his accounts.
Good Bye!! Cheers!!
CAclubindia
