TDS

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sanjay chauhan (Querist)
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06 February 2010 whenever an advance payment is made can i directly calculate tds amt on the cheque amt and not assume the the cheque amt as the net amt and then when the final bill comes i'l deduct tds on the bill amt less advance payment
For e.g. cheque amt:- 5,00,000
tds amt@10%:- 50,000
and then bill amt:- 10,00,000
tds amt:- 50,000 [(10,00,000-5,00,000)*10%]
Pls give case law reference or section reference for ur answer

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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06 February 2010 While TDS deducting on bills what ever deducted on advance payment need to considered and balance to be deducted

sanjay chauhan

sanjay chauhan (Querist)
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07 February 2010 but is it not that for advance payment u have to deduct tds and then make payment
for e.g. if u want to make a payment of rs.500,000 and tds rate is 10% then u have to deduct rs.50,000 and make payment of rs 450,000 but if party wants the cheque of rs 500,000 only u have to backward calculation and get the tds amt which comes up to rs. 55,555. isn't this the way?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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07 February 2010 Your query is little bit confusing As per My understanding

You want make the advance Rs.500000 (which should be net amount after deducting TDS) Then the gross amount will be Rs,500000/90*110 Rs.555555/- so while booking bill you need to deduct the balance amount after deducting Rs.555555/-

Suppose bill walue is Rs.600000.

You need to deduct 600000-555555= 44445x10% =Tds is Rs.4446

sanjay chauhan

sanjay chauhan (Querist)
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07 February 2010 ya thats the same thing i m saying so if cheque amt is rs. 500,000 and tds rate is 10% then the tds amt has to be Rs,(500000/90)*10 Rs.55,555/- and not directly 5,00,000*10%=50,000
hey do u have any section reference or case law reference for such calculation

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