Calculation of Interest on TDS

Save Share

This query is : Resolved

CA Kedar Sakhardande (Querist)

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)

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)

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)

21 December 2010 I SEEK SOME OTHER OPINIONS IF ANY,

CA Manikandan.A.V

CA Manikandan.A.V (Expert)

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.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now