Santosh V. Thakur (Sr. Accountant) (187 Points)
21 June 2012When to TDS deducted?
If we make payment to party/person, but we are not sure that payment will exceed the limit (eg. Payment for Prof.fees- limit Rs.30000/- p.a.), then what is procedure to follow.
1. Deduct the TDS at time of Invoice/Advance?
Or
2. Wait for invoice exceed the limit (until not deduct TDS), when exceed limit , then TDS deduct on entire bill(s) of Financial year of party?
Kindly suggest.
Thanks..
Santosh Thakur
Anandan
(HOD accounts)
(502 Points)
Replied 21 June 2012
| Originally posted by : Santosh V. Thakur | ||
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When to TDS deducted? If we make payment to party/person, but we are not sure that payment will exceed the limit (eg. Payment for Prof.fees- limit Rs.30000/- p.a.), then what is procedure to follow. 1. Deduct the TDS at time of Invoice/Advance? Or 2. Wait for invoice exceed the limit (until not deduct TDS), when exceed limit , then TDS deduct on entire bill(s) of Financial year of party? Kindly suggest. Thanks.. Santosh Thakur |
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Your second option is correct.
Anshul Mittal
(Freelancing)
(741 Points)
Replied 21 June 2012
If you are not sure that it will exceed the limit, better deduct TDS,,, ask the person for his PAN no.,, (If he do not have PAN, then charge Tds @ 20%),,
and after availing PAN "fill his PAN no and file revised TDS return",,, in this way the party will get that TDS amount......
Anshul Mittal
(Freelancing)
(741 Points)
Replied 21 June 2012
@ Anandan,,, AS per rules of TDS,, you should deduct TDS at the time of payment,, even if don't exceed the limit.....
Santosh V. Thakur
(Sr. Accountant)
(187 Points)
Replied 21 June 2012
@ Anshul, i agree with u, but not only when payment, payment or invoice booking whichever is earlier to TDS should deduct.
Anshul Mittal
(Freelancing)
(741 Points)
Replied 21 June 2012
@ Santosh,,, yea ,, correct sorry.........
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 21 June 2012
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :-
AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER)
FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 .
YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS.
BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY.
REGARDS:-
CA PRAVEEN
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 21 June 2012
| Originally posted by : CA PRAVEEN SINGH | ||
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BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
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KRISHNAPRASAD IYER
(B.Com , CA Final)
(657 Points)
Replied 21 June 2012
| Originally posted by : CA PRAVEEN SINGH | ||
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BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
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*RENU SINGH *
(✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ )
(21627 Points)
Replied 21 June 2012
| Originally posted by : CA PRAVEEN SINGH | ||
|
|
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
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Agree
Sonu Kumar
(Account Manager)
(665 Points)
Replied 21 June 2012
Dear Sir,
If we Pay more than 30000/- Annually we need to Deduct TDS.... Its nt 75000/-,
Manjunatha M K
(Manager - Accounts)
(318 Points)
Replied 21 June 2012
Dear Santhosh,
Practically what I am doing is your 2nd option !
niraj.kedia
(ca finalist)
(42 Points)
Replied 25 June 2012
Can anyone of you please provide any case law related to manufacturer making payment to dealers as incentive without deducting TDS?
Santosh V. Thakur
(Sr. Accountant)
(187 Points)
Replied 26 June 2012
when make payment to dealer as incentive, it's called commission/Brokerage paid.
You should deduct TDS @ 10% (threshold limit Rs.5,000/- per year)
Sonu Kumar
(Account Manager)
(665 Points)
Replied 26 June 2012
If we are Paying Professional or Consultancy Charges the Threshold Limit is 30000/- p.a., and Rate of TDS is 10%
CAclubindia
