Calculation of Interest on TDS

This query is : Resolved

CA Kedar Sakhardande (Querist)
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21 December 2010 Hello Sirs

I have one query on Late deduction TDS.

We have made certain payments to a CS.

Initially, we have paid them Professional Fees of Rs. 2000/- in November-10. On which no TDS was deducted.

Now, in Dec-10 we have received another Bill of Rs. 33,000/-

Since the threshhold limit of Rs. 30,000 (Section 194 J) is exceeded, we have deducted TDS on the total amount of Rs. 35,000 (Rs. 2,000 0f Nov-10 and Rs. 33,000 of Dec-10).

There is no Contract/Purchase Order, wherein ther total Value of Service can be estimated in advance.

Now I have got the following query

1) Are we supposed to pay Interest on late deduction of TDS for the month of November-2010. (Whether interest is payable on Rs. 200/- (Rs. 2000 @ 10%)?

2) In case, there would have been contract/PO or any other means to estimate the total amount payable during the financial year and this liability of Rs. 2000/- was over and above the contractual amount as a special case, whether TDS would have been deductible on this amount of Rs.2,000.If yes, the interest on late deduction/payment of TDS is applicable.

CA Manikandan.A.V

CA Manikandan.A.V (Expert)
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21 December 2010 Interest on TDS is applicable for late deduction of TDS. If the TDS on Rs. 2000 is deducted on the crossing of threshold limit of 30000/- and paid within the 7th of Next month, interest is not applicable.

CA Kedar Sakhardande

CA Kedar Sakhardande (Querist)
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21 December 2010 HELLO SIR

CAN YOU PLEASE ELABORATE?

I AM NOT GETTING CLEARLLY WHAT YOU ARE TRYING TO SAY

CA Kedar Sakhardande

CA Kedar Sakhardande (Querist)
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21 December 2010 I SEEK SOME OTHER OPINIONS IF ANY,

CA Manikandan.A.V

CA Manikandan.A.V (Expert)
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21 December 2010 The liabilty to deduct TDS arises only on crossing the limit of Rs. 30000 u/s 194 J. Interest on TDS being compensatory is not applicable for such deduction which is as per the Act.

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