Hello Bretren,
Please put your views on the following. Whether TDS is deductible where Provision for payment to contractor (not credited to any persons a/c) made on 31stMar.F.Y. end. If your answer is YES because of the following expln given u/s 194C,
"For the purposes of this section, where any sum referred to in sub-section (1) or sub-section (2) is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly"
then please advice on whose name the TDS details (that we are require to file quarterly) would go.And what if subsequently we found that no such provision was required , but by that time we had already deposited TDS in the Govt a/c.
or lets say that we had made a provision of Rs.10,000 on 31/3 but on 15/4 we got a bill of Rs.6,000. Going by the above expl.(if we take a view that TDS is required to be made on prov as well) we will have to deduct tax on Rs.10,000/ though actual invoice is of lessor amt.
Please put light on the issue.
Regards
Prince
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TDS on Exp. Provisions
Replies (1)
hi,
the matter is really very practical in nature....... Going by d income tax act it is necessary to make entry for tds when entry 4 prov. of exp.is made.......... what i have been suggesting others is as:
.....since the books of accounts r not closed on 31st march in practical ........i.e. the accounts r not finalised on 1st or 2nd april...... it takes some time to finalise the books ....... by then generally the bills can be recd.relating to the year just ended........ take the total of the bills recd. and make a back dated entry on 31st march of exactly the same amount as that of bills recd. (however it depends on how quickly the co. finalises the a/cs and whether the software of the entity allows making a back dated entry or not....... in my cases it does)............... however if the bills could not be recd. and amount can not be reasonably estimated do not make prov. entry for them to avoid problems
also pressure should b made on contractors to send bills as early as possible when it year end time
regards
Gaurav Gupta
the matter is really very practical in nature....... Going by d income tax act it is necessary to make entry for tds when entry 4 prov. of exp.is made.......... what i have been suggesting others is as:
.....since the books of accounts r not closed on 31st march in practical ........i.e. the accounts r not finalised on 1st or 2nd april...... it takes some time to finalise the books ....... by then generally the bills can be recd.relating to the year just ended........ take the total of the bills recd. and make a back dated entry on 31st march of exactly the same amount as that of bills recd. (however it depends on how quickly the co. finalises the a/cs and whether the software of the entity allows making a back dated entry or not....... in my cases it does)............... however if the bills could not be recd. and amount can not be reasonably estimated do not make prov. entry for them to avoid problems
also pressure should b made on contractors to send bills as early as possible when it year end time
regards
Gaurav Gupta
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