Tds

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Meenu Agarwal (Querist)
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21 August 2012 Suppose if a company got incorporated on 19.06.2012. And the director has made two payments for company without deducting any TDS before incorporation. One is the salary payment of Rs. 3 lacs of one director for April and half May, (salary is Rs. 2,00,000 pm.) and another is the Lawyers fees for incorporating the company of Rs. 2 lacs.
Now the company after incorporation has applied for TAN and got TAN on 23.07.2012.

Now my question is?
1. What should be the amount charged as pre- incorporation expenses?
2. Whether TDS needs tobe deducted on pre-incorporation expenses, if Yes what is the due date of deduction and payment?
3. If salary cannot be incorporation expenses, what is the due date of deduction and deposit of TDS on Salary?

Please help me. I am very much confused.

Amol S Joglekar

Amol S Joglekar (Expert)
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21 August 2012 The expenses incurred for and towards incorporation shall form the part of PRE INCORPORATION expenses. The TDS on such amount is not reuired to be done as the company was not in existence. A note will appear in the TAX audit report, if applicable.

Meenu Agarwal

Meenu Agarwal (Querist)
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21 August 2012 Can salary be the part of pre-incorporaton expenses?

Amol S Joglekar

Amol S Joglekar (Expert)
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21 August 2012 It is for the Board of Directors to determine the expenses that go into PRELIMINARY expenses. The normal rule of commerce does NOT permit such expenses as preliminary expenses but the possibility of such expenditure can NOT be ruled out in a process of PILOT project. You need to get a good resolution covering your AIMS in this.

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