Delayed debit of expense to delay due date of tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 April 2014 Dear Experts,

Kindly help me solve this query.

While auditing my client's books, I found that they had debited the professional charges on a later date than bill date so as to extend due date for payment of tds. However the date of payment was correct. Is this treatment acceptable?

To be exact,

Date of bill - 26/4/2013
date of payment - 30/4/2013
Date of entry - 1/5/2013

Entry made is as follows:

30/4
Party 5056
To bank 5056

1/5
Prof charges 5618
To TDS payable 562
To Party 5056

Please also explain that in this case, was tds payable upto 7/5 or 7/6 because the payment date was 30/4.

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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15 April 2014
TDS is to be deducted at the time of crediting a/c. of party or making payment to the party whichever is earlier.

I this case as payment is made earlier (30/4), hence TDS should be deducted on 30/4 and due date of payment of TDS will be 7/5.

In this case there is default in deduction of tax (it is deducted late), hence there will interest on non-deduction / late deduction of tax.

One more thing, TDS is not to be deducted on service tax portion (as per circular no. 1 /2014)

Regards,
Devanand

Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2014 Thankyou sir for solving my query.

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