Disallowance of Provision for Expenses if TDS not deducted

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An auditor has disallowed a year-end provision for expenses because Tax Deducted at Source (TDS) was not withheld. The discussion clarifies that while disallowance under Section 40(a)(ia) applies, interest under Section 234F might still be payable if TDS is deducted and deposited late, especially if the tax return has not yet been filed.

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(Querist)
24 December 2021 Sir
Auditor has disallowed provision for expenses made at year end , in Tax Audit , as no TDS was deducted.
Is it now necessary to pay interest on non payment of TDS.
TDS was later deducted & deposited on actual bill booking.

Thanks,
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B Sathyanarayanan

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B Sathyanarayanan (Expert)
24 December 2021 yes you have to pay under section 40 (3) you have to pay with interest under section 234 F
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manoj sonalkar

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manoj sonalkar (Querist)
24 December 2021 But already there is dis allowance u/s 40(a)(ia).

So what is the need to make interest payment.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
02 January 2022 To claim it under ITR, if not filed.
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