Interest on late payment of tds.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2014 Dear all,

The company made incentive provision for its emplyees of Rs 50 Lakh as on 31.03.2013, but the comapny paid the incentive to employees in september 2013 before filing Return of Income, TDS on incentive also deducted and paid in september 2013 and filed E-tds . Income tax department issued notice for Interest on late payment of tds. Should comapny pay the interest or is there any solution in avoiding ???? . Please give the solution and quote provision.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 April 2014 well you are liable to pay interest as TDS should have been deposited with govt by 30 April.

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2014 But the TDS on employees benefit only on payment basis...

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 April 2014 yes...but given that the notice has been issued, it appears that you have mentioned dates of March as date of payment...otherwise, how, will department get to know about creation of provision in April?

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2014 IT department came to know because we filed E-tds return in september2013,
b) For FY 2013-14 can we make provision for Incentive in the books and TDS on incentive can be remitted at the time of payment and file the E-tds in that quarter or to deducted TDS on Incentive within 30.April.2014 and remit the same.Advice the query???

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 April 2014
the problem is that if you deduct in march and pay by april end, that portion of incentive will get included in the Form 16 for that year!

the correct approach is to file the TDS return itself properly. you most probably mentioned the date of payment wrongly in the return. So first check that part. As such provisions for salary wont atract tds.

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