aishwarya s raghavan (student) (224 Points)
08 March 2013Dear All!
Please clarify whether there stands TDS liability on the part of the company in the following case.
The company has created provion on Professional charges for the month of April. This provision was not created with reference to a single vendor. Is the company liable to pay TDS on such provision created?
Thanks in advance!
CA Prashant Gupta
(DGM (F & A))
(14068 Points)
Replied 08 March 2013
yes, on provision of exp. TDS liability is applicable
you must deduct TDS and deposit
VIKAS.A
(SOMETHING IS BETTER THAN NOTHING)
(1095 Points)
Replied 08 March 2013
TDS IS DEDUCTIBLE AT THE TIME OF CREDITING OR PAYMENT WHICH EVER IS EARLIER , HERE AS U CREDITED U HAVE TO DEDUCT TDS
Vineet Jaiswal
(CA)
(141 Points)
Replied 08 March 2013
Dear Aishwarya,
Without prejudice to the above opinions, I would like to draw you attention to the following case law :
M/s. Pfizer Ltd vs. Income Tax Officer(TDS)
ITA No. 1667/Mum/2010 (date- 31-10-12)
Ø Referring to the decision given by the Mumbai Tribunal in the case of IDBI vs. I.T.O 107 ITD 45(Mum), the ITAT in the given case held that, since the payee is not identifiable at the time of making provision, TDS need not be deducted on the amount of Provision. Further, since the entire provision is written back in the next year and actual amount paid/credited was subject to TDS, the assessee has complied with TDS provisions.
CA Adesh Gupta
(Finance Manager)
(160 Points)
Replied 08 March 2013
Yes, as per provisions of TDS, tax uis required to be deducted at the time of provision for expenses or making payment whichever is earlier. So in your case TDS will be applicable & the same should be deposited to govt with 1.5% interest per month
satish kumar Chauhan
(accountant)
(347 Points)
Replied 09 March 2013
Originaly postrd by ca adesh gupta
"Yes, as per provisions of TDS, tax uis required to be deducted at the time of provision for expenses or making payment whichever is earlier. So in your case TDS will be applicable & the same should be deposited to govt with 1.5% interest per month"
I aggree with him
CAclubindia
