T.d.s.

This query is : Resolved

Chirag Asija (Querist)
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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)
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11 November 2013 No Interest to be Paid on TDS of Rs. 300

Chirag Asija

Chirag Asija (Querist)
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11 November 2013 Thanks for reply.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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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.
.

Chirag Asija

Chirag Asija (Querist)
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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 online

Aashok Kumar Sharma online

(Expert)
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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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