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Query regarding TDS on salary

Gautam Patel (CA and CWA) (146 Points)

05 October 2009

Where an assessee being an Indian company has not deducted TDS on salary which is paid to its employees being resident indians, then whether such salary shall be allowed as business expenses?

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5 Replies

Shyam Lal Naik (Service) (6156 Points)
Replied 05 October 2009

It will be allowed.

The disallowance provision is not applicable in case of TDS under section 192B.

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 05 October 2009

yes, I agree with the above solution.

for further clarification pls find the relevant extraxt of the Act,

Section 40(a)[(iii) any payment which is chargeable under the head Salaries, if it is payable

(A) outside India; or

(B) to a non-resident,

and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;]

punam (article assistant) (56 Points)
Replied 27 October 2009

I agree with the above solutions given in this issue, as Sec 40(a) doe not cover salaries. Hence Salaries shall be allowed even if TDS is not deducted.