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Tds on salary

CA Sunil Rawat (WORKING IN BPO-NON VOICE IT SERVICE) (91 Points)

27 September 2012

Hello Friends,

I just wanted to know that whether salary expense is diallowed while computing income from business & profession if company has not paid tds deducted on it before filing of income tax return. (Mention relevant sections or case law).

Regards,

CA Sunil Rawat

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5 Replies

CA Manish (Job) (5264 Points)
Replied 27 September 2012

Salary is not disallowed for non deduction of TDS

As per section 40(a)(ia) all the expenses u/s 30-38 will be disallowed if

tds has not been deducted
tds has been deducted but has not been paid during previous year or in subsequent year in time as prescribed in section 200.

Interest,
commission,
brokerage,
rent,
royalty,
fees for technical/professional services payable to a resident ,
amounts payable (for carrying out any work contract)

to a resident contractor/sub-contractor

provided that

if tax has been deducted and paid in subsequent year or
deducted in previous year but paid in subsequent year after expiry of the time limit u/s 200

then expenditure will be allowed in the year of payment of tds.

as per section 40(a)(ia) all the expenses u/s 30-38 will be disallowed if

tds has not been deducted
tds has been deducted but has not been paid during previous year or in subsequent year in time as prescribed in section 200.

Interest,
commission,
brokerage,
rent,
royalty,
fees for technical/professional services payable to a resident ,
amounts payable (for carrying out any work contract)

to a resident contractor/sub-contractor

provided that

if tax has been deducted and paid in subsequent year or
deducted in previous year but paid in subsequent year after expiry of the time limit u/s 200

then expenditure will be allowed in the year of payment of tds.

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Manoj chopra (article) (128 Points)
Replied 27 September 2012

u/s 40(a) salary will be disallowed as expenses
If a Company don't deduct/pay TDS on salary

CA Sunil Rawat (WORKING IN BPO-NON VOICE IT SERVICE) (91 Points)
Replied 27 September 2012

Thanks Manish just wanted to confirm..

CA.Ankur Khandelwal (Owner) (281 Points)
Replied 27 September 2012

As per sec. 40 salary is disallowed in case of where salary paid without deduct TDS

(A) outside India; or

(B) to a non-resident,

other then this salary is allowed

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 27 September 2012

In my opinion, the same should not be disallowed if suc hsalary is paid to Resident individual, since section 40--(related to amounts not deductible) doesn't cover the disallowance of salary in case of non-payment/deduction of TDS.