Tds
This query is : Resolved
23 November 2011
suppose i paid Rs.100000/- to contractor deducted Tds @2% (contractor is firm) , but contractor did'nt mentioned it's PAN, so while calcualting my business income , whether my whole expense will be disallowed or will i get proportionate deduction according to deduction to TDS?
23 November 2011
As per provisions of income tax act 1961 , in case of non mention of PAN the deductee has to deduct tax @20% from the payment held , but in your case u will get full deduction of expenses.
23 November 2011
Yes, Agree
24 November 2011
are you both really confirmed with your answers. i have paid this amount to a decorator,now what is your answer?
27 July 2025
Great question! Here’s the clear position under the Income Tax Act:
* When the **contractor (deductee) does not furnish PAN**, the **deductor is required to deduct TDS at 20%**, not at the usual 2%.
* If you have deducted TDS only at 2% instead of 20%, you are technically not complying with the TDS provisions.
* **However, for the purpose of computing your business income, your expense of Rs. 100,000 will still be allowed in full** (i.e., it won’t be disallowed proportionately).
* But, you may face interest or penalty for non-compliance due to incorrect TDS deduction.
**For your decorator case:**
* You must deduct TDS @20% since PAN is not furnished.
* If you deducted at 2%, you should correct this by paying the balance TDS along with interest.
* For your business income computation, you can claim full expense of Rs. 100,000.
* When the **contractor (deductee) does not furnish PAN**, the **deductor is required to deduct TDS at 20%**, not at the usual 2%.
* If you have deducted TDS only at 2% instead of 20%, you are technically not complying with the TDS provisions.
* **However, for the purpose of computing your business income, your expense of Rs. 100,000 will still be allowed in full** (i.e., it won’t be disallowed proportionately).
* But, you may face interest or penalty for non-compliance due to incorrect TDS deduction.
**For your decorator case:**
* You must deduct TDS @20% since PAN is not furnished.
* If you deducted at 2%, you should correct this by paying the balance TDS along with interest.
* For your business income computation, you can claim full expense of Rs. 100,000.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Section 194JA & JB Income which ITR Form to use
- Pass word to open justification report for Q1 for FY 2026-27
- PPF interest-As Exempt Income disclosure
- Under construction property in ITR
- Scrutiny and reopening of past returns
- Booth for sales promotion
- Upload Level ValidationITR3Category of Defect B/D
- Building tax payment deduction in rental Income
- F & O PROFIT REPORTING FOR AY 2026-27
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
