Tax deduction at source

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This query is : Resolved

Pankaj Sharma (Querist)

10 May 2008 One of our contractor billed for the month of March-08 in April-08 for the same i had done a provision entry in with expenses payable a/c on 31.03.2008 and for the same deduct TDS @ 2.06.

I have a confussion that TDS is to be deducted in March-08 or in April08 when i received Bill from Contractor.

K V Subba Rao

K V Subba Rao (Expert)

10 May 2008 Practically, we create provision for expenses (Dr: Expenses and Cr: O/s Liabiity for Exps). We take care not to credit the Contractor's account. In fact, how can one give credit to particular Contractor's Account without receiving Bill. So on receipt of Bill in Apr 08, credit his account

So TDS aspect arises in Apr 08

R.V.RAO

R.V.RAO (Expert)

10 May 2008 TDS TO BE CREDITED ON PAYMENT OR CREDIT OF BILL WHICHEVER IS EARLY.
SO IF YOU HAVE CREATED PROVISION EQUAL TO VALUE OF BILL AND CREDITED TDS IN MARCH 08 YOU ARE OK.

THE BELOW AMENDMENT GIVES YOU TIME TO DEPOSIT TDS TILL SEPT. 08

Sec 40 (a) (ia) ammendment retrospectively to allow deduction of expenses in case TDS of Mar month not paid in time but paid before due date of return

R.V.RAO

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