Gourav (Student) (86 Points)
28 November 2009Hello Friends
Please help me...
My query is regarding TDS:
In Financial year 2005-06, i have not deducted tax at source of one of my party i.e i have not created tds payable in my books and the same expenditure i have disallowed while calculating my incomefor my financial year 2005-06. In Financial year 2006-07, i have paid the tds of that party from my own pocket. Will i be allowed to claim the previous year expenditure in financial 2006-07??
Thank you..
Sourabh Sharma
(CS CA (Final) M.com NCFM Derivative Capital Market Mutual Funds)
(771 Points)
Replied 28 November 2009
not allowed to claim the expenditure in next year if u have not created tds payable account in your books......will be treated as prior period expenses.
Max Payne
(employed)
(2569 Points)
Replied 28 November 2009
Yes the expense of previous year will be allowed this year. But the TDS you paid out of your own pocket will not be allowed.
CA VINAY BANSAL
(In job with KPMG)
(289 Points)
Replied 29 November 2009
the amount paid as expense is allowed as deduction in the year in which the tax is deducted or paid.............
Shiva Kumar
(CA Final)
(208 Points)
Replied 29 November 2009
It will be allowed. Eg:
in 2005-06 Rs.10,000/- - TDS 10%, then TDS is Rs.1,000/-
Now, you have paid the amount from your Pocket. But how much have you paid as TDS in 2006-07.
Case 1: - Rs.1,000/- and this payment is debited to Expenses A/c
As rightly pointed by G.K., Rs.10,000 wil be allowed but not Rs.1,000/-
Case 2: Rs.1,000/- payment is debited to party's account as recoverable from him
Same as above, but there is no concept of disallowing the same, as the extra Rs.1,000/- was not claimed as expense in the first place.
Now, you have two options,
a) Collect this amount from him / recover from next bill
b) Wait for some 1 year or so and write off as Bad Debts, you MIGHT Get away.
Case 3:
As you have already paid Rs.10,000/- - this amount is treated as an after tds amount
In this case, If Amount is 100%, then TDS is 10%, after tax amount is 90%,
So equating 90% to 10,000/-, you will get 100% as Rs.11,111/-
Now pay Rs.1,111/- as TDS and Debit the Expenses account, you will get full credit
Good Luck
Shiva
Ankur Dhirasaria
(Chartered Accountant)
(38 Points)
Replied 29 November 2009
since the tds was not deducted in the earlier year, so there is no question of creating a tds payable account. since you have now deducted the tds but u paid it out of ur own pocket, u be allowed the expenses as deduction coz its the year which u paid the tds. and u can claim the amount paid out of ur pocket as the amount receivable 4m him
Juzer Sadikot
(CA - innovative solutions for Imports and Exports)
(1309 Points)
Replied 29 November 2009
Hey guys,
Dont you think to determine exact TDS amount, we need to gross up the amount paid?
eg. Rs. 10000/- (paid), provisions of section 194J requires TDS to be deducted from payment at the rate of 10.30% before making such payment. In such case the payment made shall be considered as (100-10.30%) 90% of amount credited and amount credited shall be 10000/90%=11148.27 and TDS amount is shall be (11148.27-10000) 1148.27.
In routine transaction where the amount of TDS is not substantial every body use to oversight this calculation but in case of International deals where in agreement for deal provided that indian party shall bear all the indian tax, we need to gross it up using above method.
Thanks and Regards
Juzer
| Originally posted by :Shiva Kumar | ||
| " | It will be allowed. Eg: in 2005-06 Rs.10,000/- - TDS 10%, then TDS is Rs.1,000/- Now, you have paid the amount from your Pocket. But how much have you paid as TDS in 2006-07. Case 1: - Rs.1,000/- and this payment is debited to Expenses A/c As rightly pointed by G.K., Rs.10,000 wil be allowed but not Rs.1,000/- Case 2: Rs.1,000/- payment is debited to party's account as recoverable from him Same as above, but there is no concept of disallowing the same, as the extra Rs.1,000/- was not claimed as expense in the first place. Now, you have two options, a) Collect this amount from him / recover from next bill b) Wait for some 1 year or so and write off as Bad Debts, you MIGHT Get away. Case 3: As you have already paid Rs.10,000/- - this amount is treated as an after tds amount In this case, If Amount is 100%, then TDS is 10%, after tax amount is 90%, So equating 90% to 10,000/-, you will get 100% as Rs.11,111/- Now pay Rs.1,111/- as TDS and Debit the Expenses account, you will get full credit Good Luck Shiva |
" |
CA. Rohit Grover
(ca in practice)
(54 Points)
Replied 21 January 2010
hello friends the thing is that i m PE-ii cleared student... nw i have registered for final on 16 NOV 2009,,,,could ne 1 plz tell when wil be my first attempt for ca Final ...is it nov 2011 or may 2012????
plz guys do reply on rohit.grover1986 @ yahoo.com
CA. Rohit Grover
(ca in practice)
(54 Points)
Replied 21 January 2010
CA. Rohit Grover
(ca in practice)
(54 Points)
Replied 21 January 2010
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