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TDS

Janani (CA Final) (40 Points)

22 July 2009

A company has deducted TDS for Contract @ 2.06%. But at the end of the year, they come to know that the limit has exceeded and that rate should have been at 2.266%. Can you clarify as to whether Surcharge should be paid along with interest from beginning or only surcharge payment is applicable from the limit?

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5 Replies

CA CS Amit Borade (Chief Accountant) (2828 Points)
Replied 22 July 2009

Hi Janani..

-> Surchcrege is applicable to total payments made during the year, since amout is exceeding the limit.

-> Interest is not applicable, since surcharge is not applicable at the begining.

As per my opnion only surcharge is applicable.

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ca tarun sharma (SERVICE) (277 Points)
Replied 22 July 2009

hi Amit can u tell me if limit of deducting tax exceed in the month of march & tds is deducted in whole amount in march and paid in april then whether the exp incurred from april to feb of previous yr will be disallowed u/s 40(a) or not & whether int will be paid on tds deposit in april if will be disallowed & int will be applicable then int on surcharge will also be applicable

please give ur opinion

CA CS Amit Borade (Chief Accountant) (2828 Points)
Replied 22 July 2009

HI Tarun

As per my opinion Exp amount is exceeding in the month of March then TDS is to be deducted in March only on total amount of Exp. Since tax deducted in the month of March paid before the date of filling of return u/s 139(1) is allowable in the same year.

ca tarun sharma (SERVICE) (277 Points)
Replied 22 July 2009

thanx amit but what will u say about interest on tds & if there is n rent agreement between parties rent of Rs 10500 p.m. and paid every month then limit wiil be exceed in last month then what will be provision for disallowance u/s 40(a) if same case as above regarding tds

if rent p.m rs 125000 as per agreement with director of company but rent is not paid during the year but credited in rent payable a/c whole amt of rent on 31 march i.e Rs 1500000 then when will tds to be deducted & paid

thanx in advance

Janani (CA Final) (40 Points)
Replied 23 July 2009

Thank you so much!!!

Originally posted by :Amit B.
"	Hi Janani.. -> Surchcrege is applicable to total payments made during the year, since amout is exceeding the limit. -> Interest is not applicable, since surcharge is not applicable at the begining. As per my opnion only surcharge is applicable.	"