Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax.
However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 40 lakh or Rs. 10 lakh respectively (the limits will be Rs. 60 Lakh or Rs. 15 Lakh respectively w.e.f. FY 2010-11) in previous year, he is required to deduct tax at source.
03 December 2010
Normally every company immediately apply for PAN/TAN after its registration. A company should not wait till the incidence of tax deduction. Suppose a company needs to deduct tds on 30.04.2010, it needs to deposit the TDS by 07.05.2010 for this TAN is must. If a company waits till 30.04.2010, it may not get TAN No. which results in late payment of TDS.
03 December 2010
Thanks experts , Few further queries. What about an individual who is the owner of a proprietorship firm?Does he also need to get TAN and recover TDS?If he has not done for past three years,is their any penaltty applicable?
04 December 2010
If a proprietorship concern has incurred expenses on which TDS is required to be deducted,then it has to take A TAN. If such expenses have been incurred but he has not deducted tax because of non-availability of TAN or any other reason, all such expenses shall be disallowed when Income tax return is filed resulting in higher tax liability for the proprietor. These expenses will be allowed in future only on payment of TDS.
If such TDS is paid in future there will be interest @1% per month of delay in payment from the time the TDS was required to be deducted till the actual payment of TDS.
"However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 40 lakh or Rs. 10 lakh respectively (the limits will be Rs. 60 Lakh or Rs. 15 Lakh respectively w.e.f. FY 2010-11) in previous year, he is required to deduct tax at source."
Say is tax audit applicable for Fy 09-10, the individual will be required to deduct TDS from Fy 10-11.
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