TDS

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Yajuvendra Rawat (Querist)
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09 July 2010 Dear Sir's & Friends,

We deduct TDS of a party who provides service of more than 5,00,000/- per year. We do business with this party for almost every year and the party is into clearing forwarding business, my question is while deducting TDS (Contractors) should i wait upto Rs. 50,000/- as per rules, or i should go with the likely to be paid principle of TDS which says that if the amount is likely to be paid during the year deduct TDS from the very beginning do not wait for the 20k & 50k slab, I had a talk with my CA about this but he is of a different view he said we should wait & see whether the payment or credit crosses the prescribed limit only then we are supposed to deduct TDS, but i am confused over (Likely to be paid or credited wordings). Please help me

Shyam Lal Naik

Shyam Lal Naik (Expert)
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09 July 2010 Your understanding seems to be rational.

The suggession of the consultant, in my view, is pedantic.

When there is every likelyhood of the amount exceeding the threshhold, better to comply from the begining.

More view solicited.

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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09 July 2010 Agreed,
If you know at the begining of financial year that transactions will be cross threshold limit, it is better to deduct tds from begining.
But we can't say that your ca view is incorrect. He is also correct.

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