TDS

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This discussion clarifies the applicable TDS rate for professional charges when issuing salary for March 2020. While salary TDS considers annual income, professional charges are subject to specific rates. If no provision was made in March, TDS should be deducted at 10%. The reduced rate applies based on the expense booking or invoice date, effective from 14th May 2020 to 31st March 2021.

R S Pandi

R S Pandi (Querist)
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27 May 2020 Dear Sir,

in the month of May' 2020 we are issuing salary for the month of march'2020. while paying salary Which TDS Rate ( 10% or 7.5% ) should be applicable for professional charges.

Kindly advice.

Regards

R.S.Pandi

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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27 May 2020 10%. please note that the 25% reduction in tds is applicable only for non salary payments

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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27 May 2020 You need to have TDS deducted at the time of creating provision for March ending if the amount and suppliers/vendor details were to have been ascertained with reasonable accuracy.

Salary TDS Deductions needs to be made taking into account whole year Income Tax Payable and as per deductions/claims/rebates as applicable and as declared.

If no provision is taken in March 2020, Professional Fee TDS needs to be deducted @ 10% and reduced rate will apply based on date of booking of expenses or date of invoice whichever is earlier taking into account the reduction rate is effective from 14th May 2020 to 31st March 2021.

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