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Urgent - Salary TDS

NAGESWARAN (ACCOUNTANT) (834 Points)

26 July 2019

One assessee business is coaching centre. Not a tax audit case as his turnover is below 40 lacs.

But he paid salary to his staff 40k per month per employee. Is there any problem as he was not deducted TDS on salary

Thanks..

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 26 July 2019

All persons paying salary are responsible to deduct TDS on income chargeable under the head “Salary”. In other words none of the payer of Salary is excluded; Individual, HUF, Partnership firms, companies, cooperative societies, Trust and other artificial judicial persons have to deduct TDS on Salary.

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NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 26 July 2019

That means salary payment exceeds 250000 its mandatory to deduct TDS on salary..Is it correct??

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Divakar (Student CA Final ) (11857 Points)
Replied 26 July 2019

no requirement in case of individual and huf is non audit case

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 26 July 2019

Dear Divakar Ji, It is no where written in sec 192 like written in sec 194C or 194 J etc that no need of deductions of tax at source by individuals or huf if last year not covered under tac tax audit

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Divakar (Student CA Final ) (11857 Points)
Replied 27 July 2019

Hmmm right....but if u r not deducting tds only ur expenses is disallowed...u can file ur return u/s 44AD....in that case no disallowance

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NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 27 July 2019

OK thanks Diwakar ji

Suresh Thiyagarajan (Student) (3986 Points)
Replied 27 July 2019

1. Sec 44AD assessee is not required to maintain books of accounts u/s 44AA and thus it would be unfair from the assessee point of view to expect to deduct TDS u/s 192 when in fact he had not maintained any books of accounts.
2. Unlike in sec 194-C where it was clearly mentioned that for the person who is not required to carry on tax audit u/s 44AB is not required to deduct TDS u/s 194C, but there is no express provision u/s 192 as such.
3. Sec 44AD had mentioned sec 30 to 38 alone to be allowed as deduction and disallowance u/s 40(a)(ia) was not covered under the same, an angle could be taken that disallowance u/s 40(a)(ia) could have been made if he had not deducted the same.
4. However in the case of I.T.O. Vs Mark Construction (ITAT Kolkata) the doubt was cleared by ITAT that there is no disallowance u/s 40(a)(ia) in case if a person had opted for presumptive taxation u/s 44AD.
5. Based on the above analysis, disallowance u/s 40(a)(ia) will not be attracted for non-deduction of TDS, if he had opted for presumptive taxation scheme u/s 44AD.
Please correct me if the above interpretation has an alternative view.