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TDS on Provisional Expenses

Arun (A.M. - Accounts) (39 Points)

10 December 2007

On 31-03-07, We made some provisions for professional fees.

We deducted TDS @ 5.1% at Rs. 6,00,000/-

Now on receiving final invoices dated : 12-11-2007 party has given invoices of Rs. 5,00,000/- only and current rate of TDS is 10.3% for professional fees.

Now, What will be our treatment of TDS on these invoices?

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5 Replies

(Guest)

TDS for the Difference amount of TDS has to be calculated and paid. Accordingly, the certificate has to be given quoting the amount on which the TDS is calculated. In this case, (500000*10.3%)-(600000*5.1%) which amounts to Rs.20900/- has to be paid as TDS and the certificate is accordingly issued

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Shyam Lal Naik (Service) (6156 Points)
Replied 10 December 2007

Dear Arun, Since you have provided the entire amount and discharged your tds liability, there is no need to deduct tds now.

(Guest)

Dear Arun, the TDS rate of 10.3% is only applicable for current financial year whereas TDS on provisions of 31st March, 07 would be at the applicable rate of last financial year. There is no further TDS liability and the concerned deductee will be able to claim refund for excess TDS deducted by you.

Surendra (Finance) (71 Points)
Replied 11 December 2007

Hi Arun.. The rate 10% is applicable from June 1st .. wat ever the provision u made in the last financial year the rate applicable is 10%. if the provision is ascertained liability.. i think to my knwledge

Vk Duggal (320 Points)
Replied 11 December 2007

AS THE PROVISION FOR FEE WAS MADE IN LAST YEAR TDS WAS TO BE PAID ON OR BEFORE 31.05.2007 AS YOU HAVE DONE. RATE OF 10% PLUS SURCHARGE IS NOT APPLICABLE. YOU CAN GIVE CERTIFICATE TO PARTY FOR THE AMOUNT OF TDS DEPOSITED BY YOU AND MAKE THE BALANCE PAYMENT TO PARTY