Frnds,
Is that Tds shud be deducted and paid for the amount for which we create provision at the year end. For eg rent,audit fees etc.
pragadeeshkanna (searching) (281 Points)
06 May 2010Frnds,
Is that Tds shud be deducted and paid for the amount for which we create provision at the year end. For eg rent,audit fees etc.
Amir
(Learner)
(4016 Points)
Replied 06 May 2010
Dear Pragyadeesh,
TDS is to be deducted at the earlier of payment or credit to the account of payee.
Further read this -
Where any sum referred to in sub-section (1) 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.
pragadeeshkanna
(searching)
(281 Points)
Replied 06 May 2010
Thank u frnds. Should the same be deducted and paid or can be deducted now and can be paid when the actual expense is booked?
TRILOCHAN
(SENIOR ACCOUNTANT)
(698 Points)
Replied 06 May 2010
YA, YOU SHOULD DEDUCT THE TDS for the amount for which we create provision at the year end. For eg rent,audit fees etc.
BECAUSE TDS SHOULD DEDUCT ON THE DATE OF PAYMENT OR CREDIT TO PAYEE , WHICH IS EARLIER
vikash rathi
(Chartered Accountant)
(787 Points)
Replied 06 May 2010
yes tds must be deducted on provisions also..........tds to be deducted on the time of payment or booking of expenses which ever is earlier...........
vikash rathi
(Chartered Accountant)
(787 Points)
Replied 06 May 2010
to understand the above concept clearly look at this example
audit fees :200000
provision : 31.03.2009
payment date : 1.08.09
tds amount : suppose 20000(10 %)
then in the given case
tds will be deducted on 31 .03 .09 and same will be deposited with in time limit (i.e. last date of return file means 30.09.09 for the 31st march) and at the time of payment to auditor....on 1.08.09 rs 180000 will be paid to auditor
hope u r doubt is clear
Prejith
(Pursuing CA)
(92 Points)
Replied 07 May 2010
If provision has been created in the month of March, then TDS has to be remitted on or before 7th of the subsequent month.
If payment/ provision has been created on the last day of the closure of books of accounts (end of FY), then TDS shall be remitted within 2months from the closure of books.
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 07 May 2010
HI all,
All the intellectuals are saying yes in regard to deduction of tax on provision, but it is not in all the cases.
Thanks
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
