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payment of TDS

prateek (CA Final) (355 Points)

20 January 2011

If a bill, due for payment which is liable to TDS, has been credited in books on 10th July whereas the tax has actually been deducted at source on 16th august and correspondingly deposited before 7th September!

My query is whether it would be said to be NON COMPLIANCE OF LATE DEDUCTION OF TAX OR NON COMPLIANCE OF LATE PAYMENT OF TDS AS WELL?

PLEASE REPLY

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12 Replies

CA.Subhankar (Accounts & Finance) (65 Points)
Replied 20 January 2011

The thumb rule is 'paid or credited whichever is earlier'.

Hence, in this case, there is a default.

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(Guest)

Both the Non Compliances would be applicable:

Late Deduction of Tax: As it is deducted on 16^th Aug

(instead of 10^th July i;e Bill Credit Dt)

Late Deposited of Tax: As it is deposited on 7^th Sep

(instead of 7^th Aug)

1 Like

Vipin Kumar Garg (Ca Final Student) (89 Points)
Replied 21 January 2011

dear prateek ,

you have attracted both the non compliance as mentioned by you,

beacuase thare is a basis rule that is "Amount Paid or credited which ever is earlier"

and in this case amount credited is earlier.

now you will have to deposit 1% simple interest on the amount on or before 7th september.

Pankaj Arora (Learner) (3134 Points)
Replied 21 January 2011

Dear vipin

Interest has changed from 01.07.10 onwards. Interest will be 1.50%

SUNNY (CA Final & CS Professional) (327 Points)
Replied 21 January 2011

hey pankaj interst on TDS 15.% monthly from 01.07.2010. is it?

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Pankaj Arora (Learner) (3134 Points)
Replied 21 January 2011

Its 18.00 %....

siri (CFO) (174 Points)
Replied 21 January 2011

in ur case both deduction of tds & deposited date both were non-compliances. so, u have to pay interest @ 1.5% p.m. i.e. 18% p.a. i.e. from 01.07.2010 and upto 30.06.2010 int. @ 1% p.m. i.e. 12% p.a.

C.S.SAVEESH.K.V. (PRACTICING COMPANY SECRETARY ) (724 Points)
Replied 21 January 2011

Dear

I Dont know whether it is correct or not plese reply

When we make & deduct TDS Entry in the account on the basis of bill , we must pay before 7th in next month

When we paid the amount to party , we must deuct and pay before 7th of next month....

otherwise it attract interest 1.5%

and non payment of TDS will attract imprisonment or penality

siri (CFO) (174 Points)
Replied 21 January 2011

for eg: u/s-194C:- if bill arises on the date of 25.08.2010. and actual payment was made in 18.09.2010.

at wat time tax is to be deducted at source:-at the time of payment or at the time of credit whichever is earlier. in the above example earlier date is 25.08.2010, so u have deduct tds as on 25.08.2010 and which is to the credit of Central govt. within one week from the end of the month in which tax is deducted.so before 07.09.2010 it is paid to central govt.

defalut u/s- 201(1A) is attracted in 2 cases:-

1.if the person responsible for deduction of at source does not deduct, wholly or partly.

2. after deducting tax, he failes to pay the same as required by the Act.

Int is calculated @ 1.5% p.m.(or part thereof) it is payable from the date on which such tax was deductable to the date on which the tax is actually paid. i.e. from 25.08.2010 to 07.09.2010.

hope it is understand to u saveesh sir.

siri.........