Deduction of TDs
This query is : Resolved
11 January 2010
Dear frinds
Ours is MNC engaged in a construction business. Our sub contractors raise bils @ end of the month which we will forward to our head quarters approval. To comply the Tds obligations we have to remit TDs on or before 7th of the following month now, but we are receiving back subcontractos cheques and approval for payment of TDS after the due date of every month. In this context can I book the libality on payment basis instead of conventioal system creating tds libality while raising the bill itself ? til date we are paying interest every month on late of remittance of tds. is there any alternative to avoid interest ?
Ours is MNC engaged in a construction business. Our sub contractors raise bils @ end of the month which we will forward to our head quarters approval. To comply the Tds obligations we have to remit TDs on or before 7th of the following month now, but we are receiving back subcontractos cheques and approval for payment of TDS after the due date of every month. In this context can I book the libality on payment basis instead of conventioal system creating tds libality while raising the bill itself ? til date we are paying interest every month on late of remittance of tds. is there any alternative to avoid interest ?
Bimal Thacker
(Expert)
11 January 2010
Yes, you should account the bill when you received back after approval and deduct TDS on such date of accounting. The TDS require to deduct on credit of account or payment whichever is earlier. Hence accounting at the time of payment will solve your problem. Only at year end you should take care of accounting on 31st March
CMA Ramesh Krishnan
(Expert)
11 January 2010
Actually tds has to book the payment or credit which ever is earlier
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