Applicability of tds on monthly provision

This query is : Open

Sandeep (Querist)
Follow

16 March 2013 As per Income Tax, TDS has to be deducted on the amounts credited or paid whichever is earlier.

Following this on provision also TDS is applicable, but as per AS29 provisions are estimates where actual amount is not known.

Whether TDS has to be deducted on the provisions made on the estimates at the month end and reversed at the next day?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

17 March 2013 No in that case TDS is not required to be deducted because it is not actually being reflected in your accounts.

CA Mukesh Jain S

CA Mukesh Jain S (Expert)
Follow

17 March 2013 When a credit is made in the books, TDS compulsorily needs to be deducted. This is the interpretation which can be drawn from the TDS provisions.