06 July 2010
Yes, TDS will be deducted even if expenditure nature is capital . for example. A buidling contractor builds factory building for company. It will be captilzed, but tds will be deducted on service bill of builder.
06 July 2010
AGREE WITH EXPERT. BUT IF CAPITAL EXPENDITURE IS IN THE NATURE OF ACQUISITION OF ASSETS TDS WILL NOT BE DEDUCTED ON SAME. ONLY CAPITAL EXPENDITURE SUCH AS ERECTION CHARGES, FREIGHT, SERVICE BILL ON CONSTRUCTION OF BUILDING, ETC ATTRACTS TDS.
06 July 2010
TDS is applicable while making payments to certain categories of persons. If you look into the payments most of them are revenue in nature but as per Section 194C even the capital payments are subject to TDS, may be on the ground that the contractor on receipt of the same may be made liable to pay tax and the law makers wish to catch hold of the revenue at the earliest point of time.
07 July 2010
No disallowance u/s 40(a) for depreciation.The disallowance is on the expenditure dr to p/l and on which no Tax is deducted.In case of Fixed Assets ,no direct debit to Profit and Loass Account.
If company is at the stage of before commencement of Business,still TDS to be deducted
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