TDS deducted in March on advance payment

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When an advance payment is made to a consultant in March based on a Proforma Invoice, TDS must be deducted at the time of payment. This deducted TDS should be deposited according to the usual timelines for March. Even though the final invoice may arrive in the next financial year, the TDS return for Quarter 4 can reference the Proforma Invoice as the basis for the advance payment.

MONIKA SALHOTRA

MONIKA SALHOTRA (Querist)

27 March 2025 In the month of March 2025, advance payment is made to a consultant on the basis of Performa Invoice and TDS is deducted at the time of making the payment.
My question is when should the TDS be deposited against consultancy? In the month of March or later at the time when the bill is received?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2025 The obligation to deduct TDS arises when the payment is made or credited, whichever is earlier. In your case, since the payment is made in March 2025, the TDS deduction obligation is triggered then. TDS deducted on the advance payment to the consultant in March 2025 must be deposited within the prescribed timelines for TDS deposited in the month of March.

MONIKA SALHOTRA

MONIKA SALHOTRA (Querist)

28 March 2025 Thanks for the update.
In case we deposit the TDS according to the timelines of March, then how do we show in the TDS return of Quarter 4- by giving reference of the PI instead of the invoice number? , as the invoice will be received in the next financial year

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 March 2025 Yes, as advance against the PI...

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 September 2025 Good luck....

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