Section 40

This query is : Resolved

CA. Niranjan Kumar (Querist)
Follow

11 April 2012 No TDS deducted on Salary payment in India to a resident, whether such payment is allowed u/s 40 or not?

I think it is allowed u/s 40, since it is paid in India and to resident. Section 40 requires deduction of TDS form salary in case of payment:-
a) outside India
b) in India to Non resident
Since Salary payment in India to a resident is not covered under section 40, that is why it is allowed, even though TDS had not been deducted. Am i right? Please Clear.

Thanks you for giving your valuable time to clear my doubt.

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

11 April 2012 Yes. Salary expenditure is allowed eventhough TDS is not deducted. But the employer have to pay interest on such TDS amount till the date of payment. Since the employee will not accept for recovery of TDS, the employer himself have to pay both TDS and interest which will be disallowed in Income Tax.

Message likes : 1 times

CA. Niranjan Kumar

CA. Niranjan Kumar (Querist)
Follow

12 April 2012 Thank You Sir for your reply. I have two another issue. Pls suggest me if you can.
Issue 1: Mr A accepted deposits from B as under:
a) Rs 10000 through account payee cheque, and thereafter
b) Rs 11000 through cash
Since agreegate amount of depost from B is more than Rs 20000, thus it is voilation of Section 269SS. My question is about amount of penalty u/s 271D.
is penalty will be:
a) Rs 21000; or
b) Rs 11000; or
c) Rs 1001 ( Rs 21000 LESS allowlable limit i.e. Rs 19999)

Issue 2: My one Freind is running a business of Video and advertisement making. Can he avail the benefit of presumptive taxation under section 44AD, if his annual turnover is less than Rupees 60 Lakh?
Thank You
Niranjan

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

12 April 2012 Point A. The Penalty u/s 271D is the amount of loan or deposit "so" accepted.
Hence, the penalty will be Rs. 11,000 which is taken in cash.

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

12 April 2012 Point B. Yes ur friend can avail presumptive taxation u/s 44AD since it does not fall under the sec 44A and the turnover does not exceed Rs. 60 lacs.
However, if 44AD is availed, no deductions or exemptions shall be available.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now