Tds

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Aanand Jha (Querist)

20 July 2013 Dear All, Please help me on following issue. In F.Y 2012-13 company made provision of Rs.25000 for fees payable to professional service provider. As amount of provision did not exceed limit , no TDS was deducted. In F.Y 2013-14 the actual payment of said fees was made along with adv. for F.Y 2013-14 Rs. 30,000. Hence total amount paid or credited aggregated to Rs. 55,000. Is the company liable to deduct TDS on entire amount of Rs. 55,000/- ?? Because plain reading of the section suggests that TDS should be deducted if amount paid or credited during f.y exceeds the threshold limit. Will it matter that part of the fee pertains to F.Y 2012-13 and part of it pertains to F.Y 2013-14 ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

20 July 2013 You made the provision entry in FY 2012-13 and paid the liability in FY 2013-14.

TDS is frequired to be deducted on the date of payment or credit whichever is earlier. In your case you made credit entry in FY 2012-13 but did not deduct TDS since threshold limit was not crossed.

So in the FY 2013-14 you are not required to deduct TDS as the payment of Rs 25000/- made is against liability and is not advance in nature.

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