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Payment of audit fees: 194j applicability

yashsr (CA) (2285 Points)

17 March 2012

Hello,

A Pvt Ltd Co who does yet have a TAN no. has to pay audit fees(and other compliance based professional fees) for the following years:

1) Financial Year 2009-10: Rs.4000

2) Financial Year 2010-11: Rs.25100

3) Financial Year 2011-12: Rs.25000

Now, it has already paid Rs.15000 on account to the CA firm in the month of February 2012. Now how should it pay its balance so as to avoid the limit of 30000 u/s 194J? Is 194J on payment basis or accrual basis?

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5 Replies

Sonam Bidasaria (CA) (770 Points)
Replied 17 March 2012

TDS u/s 194C, 194I, 194J, 194A etc will be deducted on payment or accrual whichever is earlier.

However, from the above query, it is not ascertained whether the assessee is paying audit fees iof last year in f.y. 2011-12 ?

Plz confirm.

In case if provision of audit fees already made in the respective years (I supoose which actually should have been made) to which they relate, then there is no requirement to deduct TDS as individually those amount are not crossing threshold limit.

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Niraj Mahajan (Practising CA) (985 Points)
Replied 18 March 2012

TDS needs to be made even on provisions

Also, threshold limit applies on gross basis.

yashsr (CA) (2285 Points)
Replied 20 March 2012

Hello Sonam and Niraj,

Thanks for the replies! I'll clarify my point once again. A Pvt Ltd Company is paying audit fees(and other professional charges) for the following years in the months of March 2012 ans April 2012. And the Company does want to obtain TAN No. and get into the hassle of deducting TDS, filing TDS Returns etc.

1) Financial Year 2009-10: Rs.4000

2) Financial Year 2010-11: Rs.25100

3) Financial Year 2011-12: Rs.25000

The CA has already received Rs. 15000 on account which also covers The Rs.4000 fee for FY 9-10.

The accounts for year ended 31st March 2011 are not yet prepared for some reason. They're being prepared right now. No provision has been made in books of year ended 31st March 2010 for Rs.4000 since it was not known at that time that this fee would be required to be paid.