LDC certificate

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This discussion clarifies the application of a Lower Deduction Certificate (LDC) for TDS calculations. The LDC is valid from 01/08/22 to 31/03/23. The key point of contention is whether to use the invoice date or expense date for determining TDS deduction rates. The consensus is that if the earliest event recorded in the books is the invoice date (after the LDC's effective start date), then the lower TDS rate is applicable, even if the expense itself pertains to an earlier period.

Satya Ram

Satya Ram (Querist)

30 September 2022 Dear Experts,

LDC is valid for Period 01/08/22 to 31/03/23
We will Consider Invoice Date or Expense date for calculation and deduction of TDS at lower rate.
e.g Expense pertain to Jun & July'22 but Invoice raised on 8th Aug'22 should I deduct on Lower rate or not ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

30 September 2022 Depends upon how you book the expenses. If debited earlier to the date specified, then lower rate will not be applicable, as the TDS would be deducted before the specified date.

Satya Ram

Satya Ram (Querist)

07 October 2022 Not much Clear to me request you to explain in details please

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

07 October 2022 On what date you debited first expense in your books of account?

Satya Ram

Satya Ram (Querist)

07 October 2022 LDC is valid for Period 01/08/22 to 31/03/23 We will Consider Invoice Date or Expense date for calculation and deduction of TDS at lower rate. e.g

Expense pertain to Jun & July'22 but Invoice raised on 8th Aug'22 should I deduct on Lower rate or not if I am booking expense in Oct'22 ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

07 October 2022 Earliest event on records is invoice date 8th August, so Lower rate applicable.

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