Section 40

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CA. Niranjan Kumar

Student

157 Points Posted on 11 April 2012

No TDS deducted on Salary payment in India to a resident, whether such payment is allowed u/s 40 or not?

I think it is allowed u/s 40, since it is paid in India and to resident. Section 40 requires deduction of TDS form salary in case of payment:-

a) outside India

b) in India to Non resident

Since Salary payment in India to a resident is not covered under section 40, that is why it is allowed, even though TDS had not been deducted. Am i right? Please Clear.

Thanks you for giving your valuable time to clear my doubt.

Replies (2)

kavitha

studying final

727 Points Posted on 11 April 2012

yes you are absolutely ryt

Giridhar S Karandikar

Team Lead

5675 Points Posted on 16 April 2012

Please go through the follwing link, which says that no disallowance will be attracted while calculating the Income from Business, if TDS has not being made on salaries paid to employees. In such cases, the employee will have to pay the tax by way of self-assessement in the Asst Year alongwith interest if any u/s 234B&C.

Only if salary is paid to non-resident outside India then in such case only TDS is requried to be made & if no TDS is made then the entire salary paid is disallowed.

/forum/default-in-deduction-of-tds-on-salaries-134632.asp