consequences of Tds from contract

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CA BIREN SHAH (Querist)
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03 October 2008 if i have incurred the expences in January which is under the head of contract and i had deduct tds but paid in the month of April. Are this Expences are allowed in the year in which i have deduct the tds?

when this expences are allowed?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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03 October 2008 TDS should have been made in the following month of credit. Therefore interest for delayed remittance would arise. If you have remitted the tax before filing of return, expenditure would be allowed.

PIYUSH JAIN

PIYUSH JAIN (Expert)
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03 October 2008 TDS is to be paid on 7th of next month.
In your case it will attract Interest u/s 201(1A)@ 12%.
If you have deosited such amount before return filing due date expenditure can be claimed as deduction.
Sec 271C penalty will also not be levied.

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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04 October 2008 As per section 40(a)(ia), in your case,the expenses will be allowed in the year in which you have deposited the TDS.

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