Tds as expense [Resolved]

This query is : Resolved

ashish gupta (Querist)

19 January 2012
IF a payment has been made before deducting tds but we deduct and deposit TDS later from our pocket.

Now will the tds so deposited be allowed as expense or not ?

E.g. we paid 50000 to a contractor without deducting tds and later we deposit the tds @ 2% from our on pocket. So will this 2 % be allowed as expense?

Please guide.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

19 January 2012 NO, YOU CAN NOT CLAIM EXPENDITURE FOR YOUR FAILURE. IT IS TO BE WRITTEN OFF AGAINST CAPITAL.

THE NATURE OF TDS PAYMENT IS NOT DIFFERENT FROM INCOME-TAX PAYMENT.

Guest

Guest (Expert)

19 January 2012 Ashish,

You can do one thing.

Suppose you deposit Rs. 1000/- as TDS in your case. Then you can show the party of whom you deducted TDS as Debtor for the amount of TDS Deducted i.e. Rs. 1000/- and claim from that party.

There is no need to book any expense or write it off.

As you have already paid Rs. 50000/- to that party and it can also claim Rs. 1000/- as TDS amount in its ITR. So there will be no problem and that party will give you refund of TDS amount.

Take it in another way, u were supposed to pay 49000/- to that party but u made excess payment of RS. 1000/- to it so you can show as debtor. Dnt consider diff of 1000/- due to non deduction of TDS. consider 1000/- as excess payment.

Thanks

Revert for any other clarification.

Message likes : 1 times

ashish gupta

ashish gupta (Querist)

20 January 2012 Thanks alot. Actually there will not be any other transaction with that party and we will not get any refund from the party.
thats why i was thinking not to debit his account.

Guest

Guest (Expert)

20 January 2012 Yeah, Ashish ji then you dont debit that amount.

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