Tds

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nikhil bapat (Querist)

12 August 2011 Hi friends..

I want your opinion in the following practical case :-

A private ltd company deducted tax on director remuneration. However, while making the payment, erroneously advance tax challan was filled up & payment was made as advance tax of director instead of TDS.
Now, can the company obtain declaration from director that said payment was erroneously made as advance tax instead of TDS? Or the company is still liable to deduct and pay tax again? What is the remedy available with the company so that it need not again pay tax?

Please reply

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 August 2011 The company is required to deduct TDS on the amount of salary payable to the director. However, if the amount of advance tax paid is higher, he may obtain a certificate form AO for lower or no deduction of Tax.
Pl. Go through the following text -
"Section 197 enables the tax-payer to make an application in form No. 13 to his Assessing Officer, and, if the
AO is satisfied that the total income of the tax-payer justifies the deduction of income-tax at any lower rate
or no deduction of income tax, he may issue an appropriate certificate to that effect which should be taken into account by the Drawing and Disbursing Officer while deducting tax at source. In the absence of such a certificate furnished by the employee, the employer should deduct income tax on the salary payable at the normal rates: (Circular No. 147 dated
28.10.1974.)

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