Tds on salary (Income Tax)

This query is : Resolved

( Author )
30 May 2012

I have a query.
If we fail to deduct TDS on specified payments, then that expense is not allowed to us. tell me whether TDS is necessarily required to be deducted on salaries also. and if we do not deduct then salary will be allowed to us as deduction or not and is there any need to mention the same in Tax Audit????

Siddhartha Bhardwaj

( Expert )
30 May 2012

Section 40(a)(i), 40(a)(ia) and 40(a)(iii) deal with disallowance of expenditure if TDS is not deducted or not deposited.

None of the above sections makes a reference to SALARY payable to a resident or payable in India.

Accordingly, if salary is paid to a resident or is paid in India and TDS is not deducted on the same, the salary expense will NOT be disallowed.

CA.Shiwani Sharma

( Author )
30 May 2012

Thank u sir, for making it clear.
and sir then we need not to mention the same in Tax Audit?

Siddhartha Bhardwaj

( Expert )
30 May 2012

You have to mention the details of the same in Point 27 of Form 3CD.

CA.Shiwani Sharma

( Author )
30 May 2012

Thank u sir, for making it clear.
and sir then we need not to mention the same in Tax Audit?

Siddhartha Bhardwaj

( Expert )
30 May 2012

As I said you have to give details of the same in Point 27 of Form 3CD (Tax audit report).

CA.Shiwani Sharma

( Author )
30 May 2012

Thank u sir :-)

Siddhartha Bhardwaj

( Expert )
30 May 2012

You are welcome. You should use the thanks button to convey your thanks.

Abhinav Pandey

( Expert )
30 May 2012

You will be allowed as exp only if you deducted TDS on it, as very well clarified by Mr. Bharadhwaj. But do one thing please deposit TDS before 30 sep 2012(if you are asking about FY 2011-2012) so that you will be able to get benifit of exemption in which finacial year it is actually paid. Now rules clarified it as if the TDS Amount credited in books at last month(MARCH), then you may pay it before 30sep and may enjoy exemption in same financial when it was due. if TDS amount is relating any other part of year excepting last month of FY and paid after 31st mar the amount will be allowed in FY when it was paid. I hope i have had clarified to you. Please come further if you want some other clarification