tds

This query is : Resolved

Sunil Agarwal (Querist)
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15 July 2009 suppose If x ltd pays rent to mr Y after deducting TDS but rent paid on the behalf of z ltd. later x ltd claim full amount of rent from z ltd by issuing a debit note and entry passed in the books of z ltd
Rent a/c dr
to x Ltd
then whether z ltd is liable to deduct TDS on x ltd or not on rent. and what will be the answer if x ltd has not deducted Tds on Mr y.

CA Bosu babu

CA Bosu babu (Expert)
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16 July 2009 Party responsible to deduct: Z ltd

conclusion:

1.Since on behalf of Z ltd , X ltd paid TDS as on date of credit or payments....there is no reqt on part of Z ltd to deduct TDS on amount paid to X ltd....but you should prove the same whenever AO asked...(for this show TDS certificates reced from X ltd)

2.If X ltd not deducted then Z ltd is liable to pay TDS.....

taxindiaconnect

taxindiaconnect (Expert)
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16 July 2009 The deduction of tax at source is the obligation of the party making the payment to the payee.. Thus in this case the liability to deduct is on X Limited making payment on behalf of Z limited. At the time of reimbursement of expenditure there is no requirement of deduction TDS by Z to X. IN case of non deduction by X limited then the X limited will be treated as an assessee in default for non deduction of TDS u/s 201A of IT Act.

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