Consequence of non deduction & non payment of tds

This query is : Resolved 

Querist : Anonymous (Querist) 05 April 2012

Dear Experts & Professionals

Please guide me regarding the consequence of Non-deduction & Non-payment of TDS w.r.t F.Y 2011-12 & 2012-13.

Also guide if a assessee who does not deduct nor paid TDS of the F.Y 2011-12 & deducted & paid in the F.Y 2012-13 what is the result?

Awaited for early response....


CA Siddhartha Bhardwaj (Expert)
05 April 2012

The expenditure will be disallowed in FY 11-12 and allowed in FY 12-13.

Querist : Anonymous (Querist) 05 April 2012

Mr. Bharadwaj thanks for the early reply but at the same time i bring your kind attention that you replied not in full to solve the query.

In some of my previous query too you answered/replied partly. So request you to please take note of it.

Part answere raises too many doubts. I sure that you dont take it personally and understand what i wish to say.

best regards

CA Siddhartha Bhardwaj (Expert)
05 April 2012

Section 40(a)(ia) provides that if TDS is not deducted on any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work on which TDS was deductible but has not been deducted, then the expenditure shall be disallowed.

Proviso to Section 40(a)(ia) provides that where the TDS is deducted in any subsequent year then the expense shall be allowed as an expense in the year in which the TDS is PAID.

So, on the basis of the above, since TDS has not been deducted in the FY 11-12, the expense shall be disallowed.

If the TDS is deducted AND deposited in FY 12-13, the expense shall be allowed in FY 12-13.

Hope now it is clear.

Querist : Anonymous (Querist) 05 April 2012

what about the other issues like:
interest on non deduction & non payment in time (does separate intt. levy?)

What are the penalties for both non deduction & non payment?

Whether assessee will be deemed as assessee in default? what are the remedy to the assessee?

How the TDS return will be filled for all the quarters (Since non deduction of tds so no Qtr returned yet filled by the assessee)

There are lots of issues pending regarding the matter to cover up.


shrikant (Expert)
06 April 2012

1) Interest on non deduction and non payment of TDS

2) Dis allowance of expenses in F.Y.11-12 & allowed in F.U.2012-12

3) Penalty for non TDS & non filling of return

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