Interest on tds deduction

This query is : Resolved

CA Virav Dedhia (Querist)
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14 January 2012 The assessee has made provision of expenses on 31/03/2009 without deducting TDS. As a result the assessee while filing return of income of AY 2009-10 has disallowed the provision of expenditure made U/s 40 (a)(ia). Subsequently in the AY 2010-11 the assessee has deducted TDS & paid to the credit of Revenue. Will the assessee be liable to pay interest on late deduction of TDS? What will be the scenario in case the said amount is not disallowed U/s 40 (a)(ia)?

Vineet Goyal

Vineet Goyal (Expert)
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15 January 2012 Yes, assessee will be liable to pay interest on TDS amount deducted late and will have to revise the TDS return for Q4 for F.Y. 2008-09. TDS amount which was disallowed in the F.Y. 2008-09 will be allowed in the F.Y. 2009-10.

It is not possible that these expenses will be allowed as without TDS deduction, expenses are not allowed.

CA Virav Dedhia

CA Virav Dedhia (Querist)
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16 January 2012 Thank You Mr. Vineet Goyal. Kindly update me with the period for which the interest shall be leviable. The amount has been provided on 31/03/2009, thus as per the Act the amount of TDS shall be paid by 15th May, so will the interest be levied from May to date of payment?

Vineet Goyal

Vineet Goyal (Expert)
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16 January 2012 It will be levied from 31st Mar-09 to actual date of deposit.

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