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Please advice, its urgent......

Dhanwanti (Student CA Final ) (52 Points)

24 October 2014

Can we clam cash expense against income earned u/s 194C and TDS is deducted at 1%?

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6 Replies

Jaikishan (CA) (168 Points)
Replied 24 October 2014

Cash expense cannot be adjusted against income earned for purpose of deduction under 194C. Whatever the income is earned or accrued TDS will be deducted at time of accrual or payment whichever is earlier. Later on he can claim expenses while filing of return of income if its a business and within the limits of 40 A (3).

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Dhanwanti (Student CA Final ) (52 Points)
Replied 24 October 2014

Sir few of my friends told i cannot claim expenses while filing return, so please advice.....

Dhanwanti (Student CA Final ) (52 Points)
Replied 24 October 2014

Sir my friend has salary income but previous year he also earned income u/s 194C, henceforth he wont receive income u/s 194C. Still he can claim expenses?

Jaikishan (CA) (168 Points)
Replied 24 October 2014

As regards the first question if a person is a business contractor he will prepare books of accounts and any cash expenditure he will show in his books, however TDS will not be deducted after claiming cash expenses. It will be claimed on whatever is charged or whatever payer makes payment to payee.

As regards second question cash expenses cannot be claimed now onwards since he is not earning any income and cash expense cannot be adjusted against salary income as these two are different sources of income and Salary income cannot be adjusted against business expenses as per set off and carry forward of losses. As regards last year cash expenses can be claimed against Business income.

Still you can have a second opinion for the same.