cash paid to warkers

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This query is : Resolved

DHANA REDDY (Querist)

22 May 2008 sir
my company doing construction of roads
company pay cash to its workers morethan rs 20000 on one day it is allowable
and it is laiable to deducte tds

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

22 May 2008 There is no problem regarding salary and wages

CA. GOPAL SONIKA

CA. GOPAL SONIKA (Expert)

22 May 2008 Mr Dhana pl clear whther any payment of more than Rs.20000/- is made to any one worker. If no, then payment can be made and no TDS

R.V.RAO

R.V.RAO (Expert)

22 May 2008 THERE ARE TWO INCOME TAX SECTIONS INVOLVED IN THE QUERY.
ONE QUERY RELATES TO SEC 40(a)(ia) which fortunately allows deductibility of salaries payment even if made without tds.
but TDS WHEREAPPLICABLE IF NO DEDUCTION IS MADE THE CO. WILL BE AN ASSESSEE IN DEFAULT BESIDES INTEREST ON DELAYED PAYMENT OF TDS.
HOWEVER PL. NOTE THAT THERE IS AN EXPRESS PROVISION UNDER SEC 192(3)FOR ADJUSTING EXCESS OR DEFICIENCY OR FAILURE TO DEDUCT TDS DURING THE FIN. YEAR.
THE OTHER SEC.IS SEC 40A(3) WHERE UNDER , ALLOWABILITY OF CASH PAYMENTS IN EXCESS OF RS. 20000/- IN CASH IS COVERED. PAYMENTS BY AN ASSESSEE BY WAY OF SALARY TO AN EMPLOYEE IS ALLOWED IF FOLLOWING CONDITIONS ARE SATISFIED.
1.TDS IS DEDUCTED WHERE APPLICABLE
2.WHEN THE EMPLOYEE IS TEMPORARILY POSTED TO A PLACE OTHER THAN HIS NORMAL PLACE OF DUTY FOR 15 DAYS OR MORE
3.IF THE EMPLOYEE DOES NOT MAINTAIN AT ANY SUCH PLACE A BANK ACCOUNT .
SO YOU ARE THROUGH BOTH THE SECTIONS BUT BE CAREFUL TO BE ON RIGHT SIDE OF LAW WHEN TDS IS CONCERNED.
R.V.RAO