Tds

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swasti (Querist)
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24 July 2013 A company has made payments to a contractor for capital WIP which is to be capitalised lateron on completion of work. The payments were made in F.Y. 2011-12 but the company forgot to make the provision of TDS? Now what is the remedy? Can the company make the provision of TDS now and deposit it ? Kindly guide?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 July 2013 No. No need to deposit TDS.
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What ever is forgotten it is not to be recalled.
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The Late provision U/s 234E and interest U/s 201 will "adversely affect the profitability" , (though which was absent). It is better to take care of the contractor and get filed his return without fail. Company may pay fee for that if he still has not filed the return.
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swasti

swasti (Querist)
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25 July 2013 Thanks a lot Sir for the guidance. I still have a query. I totally agree with you that past is past. But wouldn't there be any query regarding non-deduction of TDS by the assessing officer or TDS officials (although it would not result in disallowance of any expenditure as it is a capital expenditure). Here I wish to mention that company had deducted TDS in FY 2012-13 on subsequent payments made. Contractor had also filed his return for AY 2012-13. Now is there any other way in which company can pay the TDS on earlier payments and the contractor also gets the credit of the same in 26AS?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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27 July 2025 Great question! Here’s the situation and how you can handle it:

### Scenario Recap:

* Payments were made to the contractor in **FY 2011-12** but **TDS was not deducted** then.
* TDS was deducted on payments made in **FY 2012-13**.
* Contractor filed the return for AY 2012-13 based on TDS deducted in that year.
* You want to know if you can deposit TDS retrospectively for FY 2011-12 payments so the contractor gets credit in Form 26AS.

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### What you can do:

1. **Deposit TDS now for the previous year (FY 2011-12):**

* Even though it’s late, you **can deposit the TDS** with applicable **interest and late fees** under sections **201(1A)** (interest on late deduction) and **234E** (late filing fee).
* Use **challan ITNS 281**, mentioning the correct financial year and deductee details.
* File a **TDS return (Form 26Q or 27Q)** for the relevant period of FY 2011-12 as a **correction return** or a revised return to reflect this late deduction.

2. **Contractor’s credit in Form 26AS:**

* Once you deposit and file the return for FY 2011-12, the contractor will get the TDS credit in their **Form 26AS** for that year.
* The contractor can then claim credit against their tax liability for AY 2012-13 or the relevant AY.

3. **Additional points:**

* The income tax department may charge interest and penalties for late deduction and deposit.
* It is advisable to maintain proper documentation and communicate with the contractor about this to avoid confusion.
* This is the best way to regularize the situation and avoid issues with the assessing officer.

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### Summary:

* You **can pay TDS late** on the earlier payments with interest and fees.
* File the **correct TDS return** for that year.
* Contractor gets credit in 26AS for that late deposit.
* It’s better than ignoring it and risking notices or penalties.

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If you want, I can help you draft the late payment challan or guide you through filing the revised TDS return. Just ask!

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