Tds dedction from when

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Tarun Kariha (Querist)
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07 April 2018 I am cloth merchant. FY 17-18 is my first year of audit. Should i deduct tds on job work bills dated in 17-18 which are being paid in 18-19. please clarify from when to begin tds deduction on payments

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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07 April 2018 You have to deduct TDS Accounting. Bill or Payment Whichever is earlier .So you to deduct TDS for FY 2017-18,

Tarun Kariha

Tarun Kariha (Querist)
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08 April 2018 ty for your reply.need further clarification. i was told that it is not mandatory to deduct tds for the first year of audit. so i didn't apply for tds no. in FY 17-18. I applied in FY 18-19. Should i start deducting tds for the bills of FY 17-18 as i am paying them in 18-19 or only for the bills of FY 18-19.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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27 July 2025 Great question! Here's how it works:

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### When to Deduct TDS — Key Point:

**TDS should be deducted at the earlier of:**

* **The date of payment, or**
* **The date of crediting the amount to the supplier’s account (or bill date).**

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### For your case:

* Since your **FY 2017-18 is the first audit year**, you might have been under the threshold before that, so TDS deduction might not have been mandatory before FY 2017-18.
* You got your TDS TAN in FY 2018-19.
* Now, you have **job work bills dated FY 17-18, but payment is in FY 18-19**.

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### What to do?

* You **should deduct TDS in FY 2017-18 if you credited or made payment for those bills in FY 17-18**.
* However, **since the payment is made only in FY 18-19**, and you didn’t deduct TDS earlier (and also didn’t have TAN), you will need to start deducting TDS **from FY 2018-19 onwards**.
* You **do NOT need to go back and deduct TDS on old bills of FY 17-18** that are paid in FY 18-19.
* From now on (FY 18-19 onwards), you **should deduct TDS on payments made**.

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### Summary:

| Scenario | TDS Deduction Required? |
| ---------------------------------------------------------- | ---------------------------------------------------------- |
| Bill dated FY 17-18, paid in FY 18-19 (no TAN in FY 17-18) | Deduct TDS in FY 18-19 at payment time, no need to go back |
| Bills dated & paid in FY 17-18 | Deduct TDS in FY 17-18 (if TAN and threshold met) |
| Bills dated & paid in FY 18-19 | Deduct TDS in FY 18-19 (with TAN) |

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