Is it neccessary to deduct tds on prvision for exps to allow

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Amit (Querist)
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16 May 2012 i have one querry, when we pass provision for audit fees,professional fees any other expenses at the end of the year. Is it neccessary to deduct TDS to allow that expenses?

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CA Parmeshwar Rathi

CA Parmeshwar Rathi (Expert)
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16 May 2012 as and when we book the entry in books, we need to deduct TDS also.

according to the Income tax rules, TDS should be deducted at the moment of payment or passing the entry whichever is before.

outstanding or prepaid is the accounting matter which does not affect the deduction.

Sumti Bhadani

Sumti Bhadani (Expert)
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16 May 2012 As per rules TDS should be deducted on the date of payment of credit whichever is earlier. So, if you have made the provision in the books you have to deduct TDS.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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16 May 2012 TDS liability arises on payment or credit whichever is earlier, except for salary which is on payment only.

Even if the amount is not credited to the concerned party but is credited to suspense account or any expense payable account, then also tax has to be deducted. Here the doctrine of "substance over form" is applied.

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