Hello everyone,
My client, an individual, had turnover of rs. 65 lacs in FY 13-14 , but he has shown profit less than 8 % of turnover and got his account audited u/s 44AB.
now in financial 14-15, his turnover is of rs. 70 lacs and also has shown profit less than 8% of turnover and required get his account audited u/s 44AB.
my question is that whether he is liable to deduct TDS u/s 194A for payment of interest of rs. 1,21,854/-
as per my opinion TDS is not required to deduct because
194A section implies when an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section.
while section 44AB States
Every person,—
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year; or
(b) carrying on profession shall, if his gross receipts in profession exceed twenty-five lakh rupees in any previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or
(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,
so it's clearly specified in section 194A that it is required if individual falls u/s clause (a) or (b) of section 44ab, then TDS is required , but we don't fall in category of clause (a) or (b) of section 44ab.
I had read so many post in this type of issue, but could not get exat idea anywhere further also consulted other CAs but could not get same and one answer.
please give some judgement or specific idea about TDS implementation in this type of issue.
CAclubindia
