Please help me.. Its urgent. TDS query
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 August 2010
Hi,
Could anybody explain this?
During the F.Y 2006-2007 to F.Y 2008-2009, The Company has deducted the TDS on provisional basis on contractors, rent, professional fees and salaries and paid the amount. Because of the provisional payment, the TDS was paid in excess during the entire financial year. But the remittance was done after the due date. So the interest U/s 220(1A) is also attracted.
Now in this case, whether the excess amount of TDS deducted and paid can be set off and adjusted with the interest payable U/s 201(1A)?
If not, is it possible for the company to get the excess amount of TDS paid deducted and paid?
What are the provisions and the section to be referred with regards to the above query.
Thanks in advance.
Could anybody explain this?
During the F.Y 2006-2007 to F.Y 2008-2009, The Company has deducted the TDS on provisional basis on contractors, rent, professional fees and salaries and paid the amount. Because of the provisional payment, the TDS was paid in excess during the entire financial year. But the remittance was done after the due date. So the interest U/s 220(1A) is also attracted.
Now in this case, whether the excess amount of TDS deducted and paid can be set off and adjusted with the interest payable U/s 201(1A)?
If not, is it possible for the company to get the excess amount of TDS paid deducted and paid?
What are the provisions and the section to be referred with regards to the above query.
Thanks in advance.
18 August 2010
It is presumed in the eyes of law that the deductee, has availed the benefit of your deduction in full. Conseqently, the deductor cannot set of the excess TDS in interest or in subseqent years TDS.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
19 August 2010
Thanks for your humble reply Mr. Chackrapani.
I have few more doubts relater to the same query.
Suppose while filing the tds returns, the company has mentioned the correct amount of tds and filed, how can the deductee get the credit of the excess tds amount too?
For instance:
X Pvt Ltd has been deducting tds on contractors without applying any tds rates(i.e., on assumption basis). So in case of 1st quarter of F.Y 2007-2008, the TDS deducted and remitted in respect of the 4 contractors is Rs. 1000/-. While filing the tds returns, the actual tds amount for the above 4 contractors was calculated and it came to Rs. 800/- and the returns were filed showing the corect amount that is Rs. 800/-. So these 4 contractors will get the tds credit to the tune of Rs. 800 right? If yes, whether the balance Rs. 200/- would be refunded to the company? or will the balance amount be adjusted with the next quarters TDS on contractors?
Suppose this situation has arised in all the 4 quarter in the F.Y 2007-2008. So the excess amount paid during that year be adjusted with the tds liability of next f.Y?
Kindly resolve this. Thanks in advance.
I have few more doubts relater to the same query.
Suppose while filing the tds returns, the company has mentioned the correct amount of tds and filed, how can the deductee get the credit of the excess tds amount too?
For instance:
X Pvt Ltd has been deducting tds on contractors without applying any tds rates(i.e., on assumption basis). So in case of 1st quarter of F.Y 2007-2008, the TDS deducted and remitted in respect of the 4 contractors is Rs. 1000/-. While filing the tds returns, the actual tds amount for the above 4 contractors was calculated and it came to Rs. 800/- and the returns were filed showing the corect amount that is Rs. 800/-. So these 4 contractors will get the tds credit to the tune of Rs. 800 right? If yes, whether the balance Rs. 200/- would be refunded to the company? or will the balance amount be adjusted with the next quarters TDS on contractors?
Suppose this situation has arised in all the 4 quarter in the F.Y 2007-2008. So the excess amount paid during that year be adjusted with the tds liability of next f.Y?
Kindly resolve this. Thanks in advance.
10 August 2024
In the scenario where a company (X Pvt Ltd) has deducted more TDS than actually required and filed the TDS returns showing the correct amount, the excess TDS amount needs to be addressed appropriately to ensure that the deductees (contractors) get the credit for the TDS and the company handles the excess payment.
### **Handling Excess TDS**
1. **TDS Credit for Deductees:**
- **Contractors' Credit:** The deductees (contractors) will receive credit for the TDS amount mentioned in the TDS returns filed. In your example, if the company deducted Rs. 1000 but filed TDS returns for Rs. 800, the contractors will get TDS credit for Rs. 800 as per the filed returns. The excess Rs. 200 will not automatically be reflected in the deductees' credit.
2. **Refund of Excess TDS:**
- **Refund to Company:** The excess TDS amount (Rs. 200 in your case) that was deducted and remitted but not reflected in the TDS returns can be claimed as a refund by the company. To get a refund of the excess amount, the company should file a **TDS Refund Claim**. The process generally involves:
- **Revising TDS Returns:** Filing a revised TDS return to reflect the correct TDS amount. This will correct the records and indicate the excess payment.
- **Applying for Refund:** After revising the returns, the company needs to apply for a refund through the **TRACES** portal (Tax Information Network) or by submitting a refund claim to the Income Tax Department.
3. **Adjustment Against Future TDS Liabilities:**
- **Adjustment:** If the company does not claim a refund immediately, the excess TDS can be adjusted against future TDS liabilities. However, this approach involves recalculating and ensuring that the adjustments are correctly reflected in the subsequent quarters' TDS filings.
4. **Treatment Across Financial Years:**
- **Same Financial Year:** If the excess TDS is noticed and adjusted within the same financial year, it can be carried forward and adjusted against the next quarters' TDS liabilities within that year.
- **Next Financial Year:** If the excess TDS remains unclaimed or unadjusted by the end of the financial year, it can still be adjusted in the next financial year. However, it is advisable to ensure that such adjustments are correctly documented and reflected in the TDS filings.
### **Steps to Follow:**
1. **Review TDS Records:** Ensure that all TDS records are reviewed to confirm the excess amounts and the correct TDS liability.
2. **File Revised Returns:** File revised TDS returns for the relevant quarters to reflect the accurate TDS amounts.
3. **Claim Refund:** Apply for a refund of the excess TDS amount using the appropriate procedure through the TRACES portal or Income Tax Department.
4. **Adjust Future Liabilities:** If not claiming a refund, adjust the excess TDS against future TDS liabilities, ensuring proper documentation.
5. **Documentation:** Keep all records and documentation related to the excess TDS payment, revisions, and refund claims for future reference and audits.
### **Reference and Guidelines:**
- **Income Tax Act, 1961:** Refer to Sections related to TDS and refunds.
- **TRACES Portal:** For filing revised returns and refund claims.
- **Circulars and Guidelines:** Check for any circulars issued by the Income Tax Department regarding TDS adjustments and refunds.
In summary, the contractors will get TDS credit as per the returns filed (Rs. 800), and the excess amount (Rs. 200) should ideally be refunded to the company or adjusted against future TDS liabilities. It is crucial to follow the correct procedure to ensure proper handling of the excess TDS amount.
### **Handling Excess TDS**
1. **TDS Credit for Deductees:**
- **Contractors' Credit:** The deductees (contractors) will receive credit for the TDS amount mentioned in the TDS returns filed. In your example, if the company deducted Rs. 1000 but filed TDS returns for Rs. 800, the contractors will get TDS credit for Rs. 800 as per the filed returns. The excess Rs. 200 will not automatically be reflected in the deductees' credit.
2. **Refund of Excess TDS:**
- **Refund to Company:** The excess TDS amount (Rs. 200 in your case) that was deducted and remitted but not reflected in the TDS returns can be claimed as a refund by the company. To get a refund of the excess amount, the company should file a **TDS Refund Claim**. The process generally involves:
- **Revising TDS Returns:** Filing a revised TDS return to reflect the correct TDS amount. This will correct the records and indicate the excess payment.
- **Applying for Refund:** After revising the returns, the company needs to apply for a refund through the **TRACES** portal (Tax Information Network) or by submitting a refund claim to the Income Tax Department.
3. **Adjustment Against Future TDS Liabilities:**
- **Adjustment:** If the company does not claim a refund immediately, the excess TDS can be adjusted against future TDS liabilities. However, this approach involves recalculating and ensuring that the adjustments are correctly reflected in the subsequent quarters' TDS filings.
4. **Treatment Across Financial Years:**
- **Same Financial Year:** If the excess TDS is noticed and adjusted within the same financial year, it can be carried forward and adjusted against the next quarters' TDS liabilities within that year.
- **Next Financial Year:** If the excess TDS remains unclaimed or unadjusted by the end of the financial year, it can still be adjusted in the next financial year. However, it is advisable to ensure that such adjustments are correctly documented and reflected in the TDS filings.
### **Steps to Follow:**
1. **Review TDS Records:** Ensure that all TDS records are reviewed to confirm the excess amounts and the correct TDS liability.
2. **File Revised Returns:** File revised TDS returns for the relevant quarters to reflect the accurate TDS amounts.
3. **Claim Refund:** Apply for a refund of the excess TDS amount using the appropriate procedure through the TRACES portal or Income Tax Department.
4. **Adjust Future Liabilities:** If not claiming a refund, adjust the excess TDS against future TDS liabilities, ensuring proper documentation.
5. **Documentation:** Keep all records and documentation related to the excess TDS payment, revisions, and refund claims for future reference and audits.
### **Reference and Guidelines:**
- **Income Tax Act, 1961:** Refer to Sections related to TDS and refunds.
- **TRACES Portal:** For filing revised returns and refund claims.
- **Circulars and Guidelines:** Check for any circulars issued by the Income Tax Department regarding TDS adjustments and refunds.
In summary, the contractors will get TDS credit as per the returns filed (Rs. 800), and the excess amount (Rs. 200) should ideally be refunded to the company or adjusted against future TDS liabilities. It is crucial to follow the correct procedure to ensure proper handling of the excess TDS amount.
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