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Tds liability : arises on what date...?

adarsh (practice) (24 Points)

28 March 2015

I am a Proprietorship firm liable for Tax Audit U/s44AB.My firm took an Unsecured loan of Rs.10 Lakhs on 01.04.2014 from an Indivudual Raj Verma.

I have neither filed any TDS return till today nor have i recognised it in my books of accounts.

I wish to pay interest on 31.3.2015 @ 6% P.a amounting to Rs.60,000. When will my TDS liability arise ?

Also...

Can i file TDS return of annual nature without any fine ? What are the applicable rules in my case ?

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4 Replies

Kaushik Joshi (Practising Chartered Accountant) (1527 Points)
Replied 28 March 2015

Dear Adarsh, Since you are liable to tax audit from Financial year 2014-15 onwards( assuming this is the first year of tax audit), your applicability of tds shall begin from next year. Hence no need to make tds provision for the financial year 2014-15.

Avishek Tibrewal (Chartered Acccountant) (37 Points)
Replied 29 March 2015

Dear Adarsh,

Kaushik Joshi is right. But again, if this is not your first year and you have already been audited last year then you need to deduct TDS on the above amount of Rs. 60,000/- under section 194A. Now the TDS should be deducted at the time of payment or credit of intrest to the amount of person who has given the loan whichever is earlier. Now if you are bookin and simultaneously paying interest on 31.03.2015 then you need to deduct TDS on the same date and the date of payment for the amount of TDS dected in march is till 30.04.2015. So you can pay TDS deducted on 31.03.2015 uptill 30.04.2015 without any late fine. And TDS return for the quarter Jan to Mar,2015 can be filed upto 15.05.2015 without late fine.

JAYANTA (Accountant) (97 Points)
Replied 30 March 2015

Dear Kaushik Joshi ji

Can you update me what happen in the above case if it is pvt ltd / ltd company.

Viplov Surana (SERVICE) (30 Points)
Replied 30 March 2015

Dear Mr. Jayanta if in above case the loan had been taken by company, company will be liable to deduct TDS @ 10% irrespective whether it is liable for Tax audit or not