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tds short deduction

indu gurjer (CA) (50 Points)

17 June 2008

Is there some provision or circular as to what has to be done in case of short deduction of tds? say if Rs 80 only deducted instead of Rs.100 which ought to be deduted ? will such expense be disallowed in income tAX?

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8 Replies

Vishal Kokadwar (Asst Manager) (20 Points)
Replied 18 June 2008

Yes, the entire expenses will be disallowed as the provision of section is for not deducted and short deducted.

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CA. Atindra A. Prabhu Bhatikar (practising CA) (68 Points)
Replied 18 June 2008

I agree with Vishal that there is no express provision in the section for proportionate disallowance of expense to the extent of non-deduction. But a person should be penalised only for the default he has committed. In this he should bear the burden only for equivilant expense for Rs.20/- short deducted, as he has deducted and remitted Rs.80/- to the treasury. However, my view is not conclusive as to my knowledge there is no circular in this respect

Sumit (CA Practice ) (675 Points)
Replied 18 June 2008

As per section 40(a)(ib), In case TDS is short paid or deducted or not deposited, then in that case the entire expenditure is disallowed. However such an expenditure is wholly allowed in that financial year in which it is wholly deducted and deposited.

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sub: I want to form 5 annual sheet

thanks

SHALINIJITHU (Accounts executive) (22 Points)
Replied 22 February 2017

Is there any way to pay short deduction and their interest through online (2008-2009).we have 520 something amount is total deduction,How we pay this with uncliamed chalan.

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SHALINIJITHU (Accounts executive) (22 Points)
Replied 22 February 2017

Is there any way to pay short deduction and their interest through online (2008-2009).we have 520 something amount is total deduction,How we pay this with uncliamed chalan.

Mahesh Bingi (Tax return preparer) (462 Points)
Replied 23 February 2017

Calculate interest 1.5%/month on short deducted amount. Pay challan Minor Head:400, Mention Short deducted amount in Basic Tax, mention calculated interest in Interest. After payment add the challan to default statement & mention interest amount in particular cell and Add short deducted deductee to same challan. TRACES access must for this return correction.

Mahesh Bingi (Tax return preparer) (462 Points)
Replied 23 February 2017

Hi sorry, interest is 1% only.

Deposit short deduction amount with int 1% per month from date of deduction till date of deposit and do correction. Don’t forget to adjust base amount of default deductee.