Late deduction of tds

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abhijeet m. deshpande (Querist)
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01 December 2013 one of my assessees (PVT. Ltd Co) has paid remuneration to directors at the end of each month for F,Y, 2013-14 till date. It has also paid the said tax before the due date each month. However it has not passed the entry for deduction of the said tax in the books of accounts. Now the company has passed the entries in the books for deduction of tax on 01/12/2013. Is interest payable for late deduction. As the tax is deducted in the 3rd quarter, Should the assessee include the same in the 3rd quarter tds return only, filing Nil returns for the first two quarters

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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01 December 2013 "It has also paid the said tax before the due date each month. However it has not passed the entry for deduction of the said tax in the books of accounts. Now the company has passed the entries in the books for deduction of tax on 01/12/2013. "

Q1 -Is interest payable for late deduction ?
Reply-

In the view of your assessee's TDS (AO)-
When Tax is deposited well in time, Interest U/s 201 (1A) is not applicable. No interest will be charged.

Q- As the tax is deducted in the 3rd quarter, Should the assessee include the same in the 3rd quarter tds return only, filing Nil returns for the first two quarters.

Reply- Once tax has been deposited, it is immaterial when you make a formal entry in your books of account. After depositing the TDS the depositor can not absolve himself from filing e-TDS return.
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So, clearly, it's a fit case of Section 234EE. For late filing of E-tds return, penalty of Rs 200/- per day for the delay is eminent.
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In case TDS amount had not been deposited,
you could save the late fee. However, interest for late deduction and late deposit can only be charged in such a situation.
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So, it can now be advised to the clients that before depositing the tax deducted amount in case of delay, please consult the CA.

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