Tds
This query is : Resolved
04 February 2013
In case a company has not deducted TDS on onetime payment of technical fee Rs 41000 in FY 2011-12. now-
Since for onetime vendor payments, TDS from vendors cannot be collected. Therefore, we just disallow them and revise our return -
i) What are the penal consequences for non deduction of TDS apart from just disallowance of expense?
ii) Will this lead to any deferred tax expense/ income (Asset/ Liability) consequences?
iii) Generally what would be more suitable if the TDS cannot be recovered - pay it out of our pocket or just disallow the expense?
Since for onetime vendor payments, TDS from vendors cannot be collected. Therefore, we just disallow them and revise our return -
i) What are the penal consequences for non deduction of TDS apart from just disallowance of expense?
ii) Will this lead to any deferred tax expense/ income (Asset/ Liability) consequences?
iii) Generally what would be more suitable if the TDS cannot be recovered - pay it out of our pocket or just disallow the expense?
CA Prashant Gupta
(Expert)
04 February 2013
all reply is in one
don't take tension. if u didn't collect tax then pay from your pocket (means co pocket)
main purpose is to collect tax. I have done it myself. I deposit with interest and no notice or panelty came.
don't take tension. if u didn't collect tax then pay from your pocket (means co pocket)
main purpose is to collect tax. I have done it myself. I deposit with interest and no notice or panelty came.
06 February 2013
what if the amount of TDS is huge and the client is not ready to bear the expense.
what will be the penalty and other procedings in case we dont pay?
what will be the penalty and other procedings in case we dont pay?
CA Suraj Lakhotia
(Expert)
08 February 2013
Penalty for failure to deduction of Tax at Source u/s 271C - a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.
CA Suraj Lakhotia
(Expert)
08 February 2013
It would be more logical to deduct tax and then deposit from our own pocket.
CA Prashant Gupta
(Expert)
08 February 2013
as CA Suraj said " penaly is equal to TDS"
and expense will be disallowed also
so as i told first " pay TDS from your pocket (Co pocket)"
and expense will be disallowed also
so as i told first " pay TDS from your pocket (Co pocket)"
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CA Suraj Lakhotia
(Expert)
08 February 2013
If expense is disallowed, the tax impact would be as high as 30%. And it is more of a question of compliance with the tax laws as a good governance.
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