T.d.s.

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Chirag Asija (Querist)

11 November 2013 We paid a commission of Rs.3000 as on 05/10/2013 and didn't deduct the T.D.S as it is less than Rs.5000 limit u/s 194H. Then we paid another amount of RS.5000 as on 10/11/2013 to same party. Now we have to deduct T.D.S on Rs.8000. I want to ask that whether I need to pay interest on T.D.S of Rs. 300 today??

Manpalca

Manpalca (Expert)

11 November 2013 No Interest to be Paid on TDS of Rs. 300

Chirag Asija

Chirag Asija (Querist)

11 November 2013 Thanks for reply.

Message likes : 1 times

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

13 November 2013 Show the amount of 3000/- in the E-tds return while filling up the details for the month of October as amount paid or credited and indicate the reason for non deduction as -Below threshold limit.
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Chirag Asija

Chirag Asija (Querist)

13 November 2013 Bt giving reason for non deduction I need not pay interest on T.D.S of Rs.300 in November.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

26 July 2025 Exactly, you got it right!

Since the first payment of ₹3,000 was below the threshold limit of ₹5,000 under Section 194H, you were not required to deduct TDS on that amount. When you make a second payment of ₹5,000 to the same party, the total crosses ₹5,000, so TDS applies on the aggregate amount of ₹8,000.

How to handle it in the return and interest:

You should show the ₹3,000 payment in your TDS return under the relevant month (October) as amount paid but with the reason for non-deduction: ‘Below threshold limit’.

Then, deduct TDS on ₹8,000 (or on the second payment amount) as applicable.

Since the first payment was legitimately exempt from TDS deduction, no interest is payable on TDS for the ₹3,000 payment.

So, no interest penalty arises because you followed the law correctly by not deducting TDS on the first payment.

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