REG - TDS

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narender (Querist)
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08 April 2009 IF TDS IS NOT DEDUCTED WHILE MAKING ANY PAYMENT TO A CONSULTANT DURING THE FINANCIAL YEAR 2008-09 ,BUT TDS IS NOW DEDUCTED AT THE END OF THE YEAR (MARCH MONTH), IS THERE ANY PENALTY FOR SUCH A LATE DEDUCTION....

TOTAL CONSULTANCY FEES PAID UPTO FEBRUARY - 4,00,000 RS.

CONSULTANCY FEES FOR MARCH - 80,000

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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08 April 2009 Yes, If a person fails to deduct the whole or any part of TDS as required under any of the provisions of sections 192 to 196D then:
(a) The person responsible for deduction is treated as 'assessee in default'
(b) He shall be liable to pay by way of penalty a sum equal to the amount which he failed to deduct.
(c) He shall be liable to pay simple interest @12% p.a. on amount of tax liable to be deducted.

narender

narender (Querist)
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08 April 2009 PLEASE CALCULATE TDS WHICH NEED TO BE DEPOSITED & THE INTEREST THEREON

IF THE TOTAL CONSULTANT FEES IS 4,50,000 FOR F.Y 2008-09

CAN WE DEDUCT THIS TAX FROM HIS NEXT YEAR CONSULTANT FEES

narender

narender (Querist)
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narender

narender (Querist)
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narender

narender (Querist)
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Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2025 Here's a detailed response to your TDS query for FY 2008-09:

1. Is there penalty for late deduction of TDS?
Yes, TDS should be deducted at the time of payment or credit, whichever is earlier.
Deducting TDS late (in March for payments made earlier in the year) attracts interest under Section 201(1A):
1% per month (or part of a month) of delay in deduction of TDS.
1.5% per month of delay in depositing the deducted TDS with the government.
There is no separate penalty for late deduction but interest applies.
2. TDS amount calculation:
Assuming the applicable TDS rate on consultancy fees is 10% (common rate for professional/consultancy fees):

Particulars Amount (Rs.) TDS @ 10% (Rs.)
Consultancy fees up to Feb 4L 40K (should have been deducted earlier)
Consultancy fees for March 80K 8K
Total consultancy fees 4,80K 48K
Since TDS was not deducted earlier, you are now deducting it at year end.

3. Interest calculation:
Interest @1% p.m. on non-deduction period (from when payment was made till TDS deducted).
Interest @1.5% p.m. on delay in depositing TDS (from date of deduction to date of deposit).
To calculate exact interest, you need dates of payments and actual TDS deposit date.

4. Can TDS be deducted from next year's consultancy fees?
No, TDS for FY 2008-09 should be deducted and deposited in the same financial year.
You cannot adjust or deduct previous year's TDS in the next year's payment.
Late deduction and deposit in the same FY is allowed, but deduction next FY is not permitted.

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