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Query on tds u/s 194 h

This query is : Resolved 
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Querist : Anonymous

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Querist : Anonymous (Querist)
14 November 2014 Dear Experts,

Our company makes an entry of Commission payable provision on sale of goods by agents

But as per the contract the agents are only eligible for commission on receipt of money from our customers

The company is following the practice of deducting TDS only when payment is received from customer and not when they are creating provisions

Provision Entry:-
Commission Expenses Dr.
To Commission payable

When money is received from customer:-
Commission payable Dr.
To Agent A/c
To TDS payable


which is contradictory to Income tax law as TDS on Commission/Broker is required to be deducted @ 10% at the time of:-

->Making such payment or
->Credit of such income to the account of the payee in the books of the person deducting such TDS
whichever is earlier.

Is the company liable to pay interest on delayed payment of TDS in this case??

please revert...
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Amol S Joglekar

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Amol S Joglekar (Expert)
14 November 2014 Yes. The company should pay the interest.
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