26 June 2015
we have deducted TDS @ 2% for an organisation which is exempt from Income tax and does not have PAN. Hence, we put his TAN number is PAN field in TDS return of F.Y. 13-14.
Now, error in PAN number is reflected. If we leave it blank, it asks for TDS @ 20%.
How should i deal with this problem when actually TDS was not even deductible.
Please consider the first para, that organisation does not have PAN and they are exempt from Income Tax.
When 2% was not even deductible, if we deduct 20%, it will be grossly unfair.
the problem is that TDS return is not accepted without PAN, they don't have PAN neither they need and deducting 20% is not possible. And the case is 2 years old.
26 June 2015
Pankaj u also consider wat i hav suggested, in that case u r liable to pay 20%, whether u deduct from the party or pay from ur pocket. U r the deductor, so u r liable to deduct the correct Tax. If u wanna save urself then ask them to apply for PAN and quote u the PAN. Otherwise, u r liable as per Income tax for the amount.
The Law say if the party not having PAN no then TDS must be deducted on Actual TDS % or 20% whichever is higher. If the organisation does not having pan and if you are not deducted TDS accourding to this then your whole expenses will be disallowed.
And keep one think in your mind that you are not pay anything over and above the actual ex. The deductor has liability to Deduct tds as per Law otherwise burden impose on you.
CAclubindia
