Lower rate of tds
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 November 2013
Hello,
This is with relation to tax deducted at lower rate.
The client has been furnished with Lower TDS certificate with XX amount and YY rate of lower TDS.
Now while making the payment in the financial year the billing has been exceeded the XX amount and accordingly the client has made excess payment to the party.
Now the client wants to recover that excess payment through adjustment in the another invoices of the next financial year including interest penalty.
My question is whether the client can recover such TDS from the party?
If yes then whether the party is liable to pay that Interest penalty?
What is the remedy available to both client and party if both party dont want to set mutually.
Further is there any section or clarification or notification over this situation.
Please guide on above situation.
This is with relation to tax deducted at lower rate.
The client has been furnished with Lower TDS certificate with XX amount and YY rate of lower TDS.
Now while making the payment in the financial year the billing has been exceeded the XX amount and accordingly the client has made excess payment to the party.
Now the client wants to recover that excess payment through adjustment in the another invoices of the next financial year including interest penalty.
My question is whether the client can recover such TDS from the party?
If yes then whether the party is liable to pay that Interest penalty?
What is the remedy available to both client and party if both party dont want to set mutually.
Further is there any section or clarification or notification over this situation.
Please guide on above situation.
13 November 2013
yes. You can ask the client with regards for recovery of TDS. However, the interest penalty shall be yours.
You can avoid the above, if your client pays taxes on such income on his own.
Refer: Proviso to Section 201(1).
"Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident—
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed"
See rule 31ACB and Form No. 26A too
You can avoid the above, if your client pays taxes on such income on his own.
Refer: Proviso to Section 201(1).
"Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident—
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed"
See rule 31ACB and Form No. 26A too
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