Paid more than 20,000 and ....

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shree (Querist)

18 January 2015 Sir
Our is a partnership firm. We paid Rs. 1,00,000 through bearer cheque to contractor in November-2014; and in December I have paid TDS on that amount.

Now will I have to take return that paid amount from contractor. ?

shree

shree (Querist)

23 April 2015 Comments please ...

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

09 August 2024 In the context of Indian tax laws, particularly under the Income Tax Act, 1961, the treatment of payments made to contractors and the associated Tax Deducted at Source (TDS) is crucial for compliance. Here's a breakdown of your situation:

### **Key Points:**

1. **TDS Compliance:**
- Since you paid Rs. 1,00,000 to the contractor through a bearer cheque in November 2014 and deducted TDS on that amount in December 2014, you have already fulfilled your obligation of deducting and depositing TDS with the government.

2. **Return of Paid Amount:**
- The requirement to "take return" of the paid amount from the contractor is typically associated with obtaining a TDS certificate from the contractor. For the contractor to be able to claim credit for the TDS deducted, you need to provide them with a TDS certificate (Form 16A) that reflects the amount of TDS deducted.

3. **Documentation and Compliance:**
- Ensure that you issue Form 16A to the contractor, which details the TDS deducted. This form should be issued quarterly and should reflect the amount deducted and deposited with the government.

4. **Contractor's Return Filing:**
- The contractor will need the TDS certificate (Form 16A) to claim credit for the TDS in their income tax return. If you haven't issued this form or the contractor is facing issues, it is important to rectify this by providing the necessary documentation.

5. **Income Tax Return Filing:**
- Ensure that you correctly report the TDS deducted in your firm's income tax return. Also, the contractor should report the income and claim the TDS credit in their income tax return.

### **Action Steps:**

1. **Issue Form 16A:**
- Generate and issue Form 16A to the contractor. This form should reflect the details of the payment and the TDS deducted.

2. **Keep Records:**
- Maintain proper records of the payment, TDS deduction, and the issuance of Form 16A. These records are important for compliance and any future scrutiny by tax authorities.

3. **Consult a Tax Professional:**
- If there are any specific concerns or issues, it is advisable to consult a tax professional or chartered accountant who can provide personalized guidance based on the specifics of your situation.

### **Summary:**
You do not need to "take back" the paid amount from the contractor. Instead, ensure that you have issued the necessary TDS certificates and properly documented the payment and TDS deduction. The contractor should use this certificate to claim the TDS credit in their income tax return.

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