Valerian Dsouza (Manager Audit & Taxation) (405 Points)
08 August 2011We are a Company have incurred some expenses in the F.Y. 2010-11 on which TDS u/s. 194 of the IT is applicable.
However, till date (8.08.2011) through oversight, we have not paid TDS. We want to pay the same with applicable rate
of Interest now.
On payment of the TDS before filing of IT return i.e. 30.09.2011, Whether the expenses would be deductible from taxable
income for the F.Y. 2010-11 ?
Kindly advice please.
Thanks a lot.
Valerian D'Souza
Accounts Manager
Mihir
(Wealth Manager)
(5293 Points)
Replied 08 August 2011
u/s 271C failure to deduct TDS - liable to pay simple interest at 12% p.a on amount of tax liable to be deducted.
It willl be deductible.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 08 August 2011
ineterest will be 1.5 per month i.e 18% p.a
As per section 201(1A), if any principal officer or company doesn't deduct tds the whole or any part of tax or after deducting fails to pay the tax as required by or under this act ,will be liable to pay simple interest
1) @ 1% for every month or part of month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted .
and
2) @ -1.5% for every month or part of month on the amount of such tax from the date on which such tax was deducted to the date on which is actually paid and such interest shall be paid before furnishing TDS statements.
Ranjit pandit
(CA student)
(24 Points)
Replied 08 August 2011
Failure to deduct tax or pay
according to section 201 of IT Act.
Any person responsible for deducting tax at source is liable to pay interest if he
(a) does not deduct the tax ( either whole or part )
(b) After deducting the tax, fails to remit the tax to the govt,
- simple rate of interest @ 15% ( earlier it was 12%) p.a. on the amount of tax.
period of interest will be calculated from the date of on which tax deductible to the date on which such tax is actually paid.
Time limit -- It shall be paid before furnishing the quarterly statement for each quarter.
Valerian Dsouza
(Manager Audit & Taxation)
(405 Points)
Replied 09 August 2011
Many Thanks and very kind of you, request you to clarify, on payment of the TDS before 30-09-201, whether the relevant expenses of F.Y. 2010-11, will be deductible as expenses ?
yes ,on payment of tds on or before 30.9.2011 ,the relevant expenses will be deductible.
Finance act 2010 -w.e.f 01.4.2010
As per section 40(a)(ia) , no disallowance will be made if after the deduction of tds during the the previous year , the same has been paid on or before the due date of filing of return of income.
However this amendment is to take effect retrospectively from 1st april 2010 and will accordingly apply on relation to assessment year 2010-11 and subsequent years.
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