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Tds query

S.RAJASEKARAN (ACCOUNTANT) (56 Points)

26 June 2015

Dear Sirs,

Please explain the TDS in below situation

1)Rs.40000 by single payment to a contractor . Now Tds is applicalbe for Rs.40,000 or Rs.10,000/-(40000-30000)

2)An aggregated amount of Rs.60000 (3 times * Rs.20000) given to a contractor. Now Again a payment making for a sum of Rs.25000) . In this situation How much is the assessable value for TDS.

Then

Salary accounted on April 30th and Payment done in May 1st or 2nd. Now TDS Paid on or before 7th of May means no problem. If paid in 8th May means how to calculate the interest.

Rs.90,000 Pyment done in April'15 (Q1)and not deducted any TDS on that time (94 J). Balance amount Rs.10,000 paid in January'16(Q4). Now how i need to show the Assessable amount in return because Quarter is different.

( I require interest percentage and days or monthcalculation metheod clearly)

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9 Replies

Rashi Bajaj (CA) (752 Points)
Replied 26 June 2015

Part 1. Contractor:

Situation One: Where one time payment of >30K is made, TDS on whole amount is to be deducted and not just the excess.

Situation Two: Where piecemiel payments of 20K each is made and an additional 25K is paid, TDS on entire 85K is to be deducted and balance is to be deducted u/s 194C.

Part 2: Salary:

As per TDS provisions, "part of the month is considered as full month" Therefore, if payment is made on 8th May, one month interest is applicable.

Part 3. Professional fees:

Q1: Amount of TDS pertaining to 90K should be paid along with interest. You can revise return f Q1 to include the effect of this transaction.

Q4: Only TDS amount is to be paid(if payment within due date). In return include transaction amount of 10K only.

Hope the above helps

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 26 June 2015

I agree with Rashi except for the following:

In case of salary, tax has to be deducted at source from the date of payment (not credit) in which case, u hv time to pay tax till 7th June 2015. So if tax is paid before this due date, no interest is applicable.

1 Like

Krishna Raj Jaiswal (ca) (41 Points)
Replied 26 June 2015

Sorry to say guys but in case of default in pmt of TDS by a single day, 2 month interest @ 18 % p.a. would be levied. I am also agrees with the reply made by Rashi except on above point.

vivek (Student CA Final ) (23 Points)
Replied 27 June 2015

Agree with rashi n Krishna..

ujjaishravan (accountant) (212 Points)
Replied 27 June 2015

Part 1-situation 1,2 are answered clearly

part 2. interest @ 1.5% for "one month" on late payment will attract even it is one day delay. (i.e.,) any part of month is considered as on full month

instead of paying late payment interest @ 1.5%, file it as late deuction with 1% interest. you can show full 100000 in the q4 return.

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Rashi Bajaj (CA) (752 Points)
Replied 27 June 2015

Oh! right Poornima and Krishna. Thanks for correcting me. Sorry for the error folks.

Bittu (B.Com) (21 Points)
Replied 27 June 2015

Hi,

I am dealing in partnership Firm. Our bank has deducted TDS on FDR. i have passed entry for the same as. e.g. Intt on fdr 26600 TDS 266

Intt on fdr amt Cr 26600

FDR Ac Dr 26334

TDS Ac Dr 266

So, My question is in the balance sheet 31.03.15 tds receivable was 266 Dr..and in the 01.04.15 i passed the entry for tds as

Partner account Dr 133 each total 266

TDS Cr 266

is it right or not.??

Jagadeeshwar (Self) (21 Points)
Replied 27 June 2015

Dear Sirs,

I HAVE FILED Q1 AND Q2 (24Q) RETURNS WITH CHALLANS , AND FILED Q3 AND Q4(24Q)

NILL RETURNS (SINCE THERE IS NO PAYMENTS AND CREDITS ) ,I HAVE DECLARED FOR 24Q Q4 AS NILL WITHOUT FILLING OF ANNEXURE 2 .

YOUR ARE REQUESTED TO ADVISE THAT HOW TO REVISE 24Q Q4 TO FILL ANNEXURE -2

THANK IN ADVANCE FOR SOLUTION

CA ASHOK DAHIYA (CA) (135 Points)
Replied 27 June 2015

Salary and Interest

In case of tds on salary, tds shall be deducted on payment date not on due date. so if salary is paid on 1st or 2nd may, the due date of depost of tds shall be 7th june. so clearly by 7th june no interest is needed to pay. if it becomes late, then 1% per month shall be paid and part of a month shall be considered as full month. In case tds is not deducted, then interest shall be paid @ 1.5% per month from the date of payment to the actual date of deduction.

Contractor 194 C

In case of payment to contract under single payment upto 30K, no tds is required to be deducted, if all payment crosses 75000 in a year, then tds shall be deducted on total amount paid in the year at the time of last installment, if not deducted earlier.