Non deduction of TDS and Non filling of TDS return.

This query is : Resolved

CA. Baikunth (Querist)
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08 July 2011 one of my client has not deducted the TDS on rent nor he has filled the TDS return. Now is there any way to save him from penalty and interest or way to minimise his penalty and interest ???????

U S Sharma

U S Sharma (Expert)
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08 July 2011 bifurcate the rent amount in below tds level in multiple receipents.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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08 July 2011 I do not agree with the expert.

Deduct the Tds now, and prepare the return of Tds and file it. As per income tax act the provision of section 40a(ia) is applicable for business expenses. If the rent related to assessment year 2010-11 then the time limit of filing of return is over. Hence in that year the entire rent as paid will not be allowed. But if you deduct during the year and file the TDS return after payment of TDS then the entire expenses shall be allowed to you during the assessment year 2011-12 for 2010-11 and also for 2011-12 also.

So without waiting and much loss of time kindly deduct the tax and pay it. If the rent is not sufficient then also pay the tax in form of TDS debit it to the account of your land lord and recover on yearly basis.