28 July 2016
Dear Respected Team, TDS We are required to deduct on Credit or payment Whichever is Earlier.Where Credit Means What ? Whether Accrued Or Due ?? Suppose Our Client Taken BC Loan On 15-Mar-16 Amount of $1000 @ 9% Interest, Actually Due On 15-jun-16 Along With Interest. For Closing Books as on 31-mar-16 We created provision for 17 Days Interest On that Time We are Required to deduct TDS ?? Please Tell me relevent answer with supporting of relevent sections of Act.
28 July 2016
Credit means crediting to any ledger for recognizing the liability. Its covers provisions also. You have to deduct TDS while making provisions.
28 July 2016
audit fee bill from the auditor xyz & co, chartered accountants is booked on 31/03/2016,payment is made on 10/05/2016 entry on 31/03/2016 would be debit audit fees credit xyz & co This is credit as envisaged in the said section 194J..... see in this credit happened on 31/03/2016, although payment occurred on 10/05/2016..... so it is said credit or payment whichever is earlier
28 July 2016
at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier
Please note....on provisions like say debit audit fees credit provision for audit fees.......NO tds is required to be done
TDS is required to be done ONLY if "such sum is credited to the account of payee OR at the time of payment, whichever is earlier
28 July 2016
Thanks for Amol S Joglekar Sir Detailed Explanation. Sir If Possible Means please Kindly Provide IT Act Section Refference For Deffinition Of Credit And TDS Deduction requirement provision Section .
28 July 2016
The sections....194C, J I etc.....talk of the same concept......credit or payment whichever is earlier...... and what is your EXACT botheration? Tell me......why do you want case law or guidance note etc etc?? Whenever there is any AMBIGUITY, then only such things like case law or guidance note is looked into. But these provisions of section 194C....J ...I etc are very clear...So no need for any guidance..... Please tell me what is bothering you in this?
28 July 2016
As Per Circular : No. 619, dated 4-12-1991, credit of any income to any account whether called "Suspense account" or by any other name shall be deemed to be credit of such income to the account of the payee
AS per Circular : No. 5/2002, dated 30-7-2002, Suppose In Relation To Interest, Tax has to be deducted at source at the time of credit of interest to the account of the payee or at the time of payment thereof, whichever is earlier. If credit is given to the account of the payee or payment is made to him annually, the tax may be deducted annually. It may be clarified that a credit to interest payable account or suspense account, etc., is also taken as credit to the account of the payee, even though this credit is not reflected separately in the payee’s account.
So, Provisions Created On 31-Mar-16 For Satisfing Accruval Concept Also, We Are Required To Deduct TDS.
CAclubindia
