15 May 2024
If TDS is not deducted and we have not claimed the expense in our profit and loss accounts, what are the consequences of it? Further, we are filing our Income Tax Return under section 44AD for the current year. I am aware that a 30% disallowance is there, but since we are not claiming expenses, it does not matter. Are there any other consequences?
16 May 2024
see, the disallowance of expense is not applicable under presumptive taxation. However, you need to comply to the TDS provisions. So, penalties for non-deduction of TDS, late payment of interest, non-filings of TDS return etc - all these things are applicable. Now, someone may argue that how will an AO verify this if there are no books of accounts maintained. In absence of books of accounts, how do he establish whether the payment attracted TDS or not. This issue can get triggered indirectly because of GST returns wherein data is often available for the nature of supply.
So, technically, TDS provisions apply. AO may not be able to make disallowance on the basis of information directly provided by the assessee. But AO can get access to a lot of info from sources like GST filings.
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