Expense allowability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2010 Our pvt Ltd is going to pay sales incentive to MD by passing a provision entry in the month march 2010 (Actual entry passed in August with date of 31-march-2010)
following entry passed
sales incentive dr
Sales incentive payable cr

we are not crediting particular party

TDS will be paid once the amount is actually paid (may be in December)

My doubt is that can we claim this expenditure for the F.y 2009-10 ( even though TDS is not paid).
My thinking is that TDS is applicable only if we are crediting to particular party?

Thanks in advance

Manek Amit

Manek Amit (Expert)
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12 August 2010 If you dont deduct TDS then you can claim this exp in f. y. 2009-10
because provision says that you are supposed to deduct TDS either credit or payment whichever is earlier
credit means credit of the exp either in account of party or credit to expense payable account in either of the way you have to deduct the TDS.
Its better to pass an entry in march after deducting TDS and then pay amount on August
then you can claim in F. y. 2009-10

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2010 Dear Amit,
so, Can I pay the TDS before filing the Return for F.Y 2009-10 to claim the expenditure in the F.y 2009-10 itself?

Manek Amit

Manek Amit (Expert)
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12 August 2010 Yes you can

Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2010 dear All,
if we treat sales incentive as part of salary and we are including this part in the form 16 of MD in the f.Y 2010-11, then what is TDS implication.? shall we make a provision to TDS in the Month itself or while paying the amount TDS deduction is enough?