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TDS

23 September 2010

An assessee liable for 44AB audit did not deduct tax at source(u/s 194C) but he is now ready to pay his TDS liability from his own pocket before 30th sept. I Want to know whether he can claim deduction in respect of the said expenditure u/s 40a(ia)

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7 Replies

SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)
Replied 23 September 2010

Yes, it can claim deduction

but TDS should be deducted entry should be passed in the month of march(i.e.31st march)

but he has to pay the TDS before 30th sept. along with whole intrest upto the date.

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JINESH SHAH (PRACTICING CA) (151 Points)
Replied 23 September 2010

YES HE CAN. TDS SHOULD BE PAID BEFORE FILLING INCOME TAX RETURN . TDS CAN BE DUDCTED AT ANY TIME DURNG 2009-10 NOT IN MARCH ONLY.

Santosh (Student ( Final Year - New )) (348 Points)
Replied 23 September 2010

Originally posted by : PRADEEP & SUDHIR JI
	Yes, it can claim deduction but TDS should be deducted entry should be passed in the month of march(i.e.31st march) but he has to pay the TDS before 30th sept. along with whole intrest upto the date.

CA Trinath Galla (student) (3130 Points)
Replied 23 September 2010

Originally posted by : JINESH SHAH
	YES HE CAN. TDS SHOULD BE PAID BEFORE FILLING INCOME TAX RETURN . TDS CAN BE DUDCTED AT ANY TIME DURNG 2009-10 NOT IN MARCH ONLY.

CA. SUDHARSAN K G (Chartered Accountant) (472 Points)
Replied 24 September 2010

Dear Savitha Madhavan,

I hereby suggests you the THREE Options

OPTION: 1
There is a Exception from Deduction of Tax u/s. 194 C if the Assessee is not covered by the Tax Audit in the PRECEEDING PREVIOUS YEAR.

That is if he is not covered by the Tax Audit in the Assessment Year: 2009-10 he neednot to deduct TDS u/s. 194 C in the Previous Year: 2010-11

Just take this advantage if it applies to the Assessee.

OPTION: 2

There was a recent case law which states that disallowance u/s. 40a(ia) is applicable if the Amount is not Paid. That is as on 31st March the Payment to the Contractor should be Paid not Payable (Creditors) in your Books.

In Simple it applies to Amount Payable not to the Amount Paid.

The Fact revealed by

The Jaipur Tribunal in case of Jaipur Vidyut Vitran Nigam Limited vs DCIT (2009 ) 123 TTJ 888

on the grounds of following provision of the section

(ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has. not been deducted or, after deduction, has not been paid,-

OPTION: 3

Otherwise make the Remittance with Interest before Filing the Return.

Hope u understand and take the stand whichever is beneficial to your Assessee

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XYZ..... (-) (516 Points)
Replied 24 September 2010

WHAT IS THE RATE OF INTEREST THAT THE FIRM WILL HAVE TO ADD TO TDS TO BE PAID BEFORE 30TH SEP. . WILL IT BE ON ENTIRE AMOUNT OF TDS THAT HAS TO BE PAID?