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Non payment of tds on rent

This query is : Resolved 

Dear Sir,
I have paid rent of factory more than 300000/- in last year 2011-12. but forget to pay tds whether rent expenditure will be disallowed in the year 11-12 or is any solution available.

Please guide.

Regards,

If you pay TDS before the due date of filing the return, then the expense will NOT be disallowed.

Otherwise it will be disallowed in the current year and allowed in the year in which the TDS is paid.

but it should be in the month of March so as to pay before due date

Dear Sourabh, please read Section 40(a)(ia) which provides that the expense shall be disallowed if the TDS is deducted but not deposited before the due date of filing the return.

Section 40(a)(ia) DOES NOT make a distinction between TDS deducted in the month of March and TDS deducted in other months.

If TDS deducted in the month of November, December, January is deposited BEFORE the due date of filing the return, the expense shall be allowed.

Section 40(a)(ia)
Tax is deductible (and is so deducted) during the last month (i.e., in the month of March) of the previous year but it is not deposited on or before the due date of submission of return of income under section 139(1)

No deduction in the current previous year

If tax is deposited with the Government after the due date of submission of return of income, the expenditure will be deductible in that year in which tax will be deposited.


Tax is deductible (and is so deducted) during any month but other than the last month (i.e., any time before March 1) of the previous year but it is not deposited on or before March 31 of the previous year

No deduction in the current previous year

If tax is deposited with the Government after the end of the current previous year, the expenditure will be deductible in that year in which tax is deposited.

though some relief has been given that in case we pay tds on or before due date of filing of the income tax return expenditure will be allowed in the same previous year but in case of non deduction of the tds when it is deductible then expenditure will be disallowed fully.

Dear Sourabh this is the old provision. The current position is as under:

The following amounts shall not be deducted:

any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139

Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid

As is clear from the above wordings, Section 40(a)(ia) makes no distinction between the month of March and other months.



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