TDS Deduction applicability

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This query is : Resolved

Quick Summary

If your turnover exceeded the limits specified in Section 44AB(a) for the financial year 2018-19, you are likely required to deduct TDS under Section 194A for the financial year 2019-20. This applies even if you filed your return under Section 44AD. It's advisable to err on the side of caution and assume TDS deduction is necessary.

Sunny

Sunny (Querist)

11 March 2020 I have filed return u/s 44AD for F.Y. 2018-19 declaring profit @6% of turnover and my turnover was 1,10,00,000 (1.10 crore).

For F.Y. 2019-20 do I need to deduct tds u/s 194A?

Am I liable to deduct TDS for F.Y. 2019-20??

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

11 March 2020 Yes, liable to deduct in 2019-20 because turnover in 2018-19 exceeded the limit prescribed in 44AB(a).

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

11 March 2020 From the plain reading if the proviso to sub-section (1) of Section 194A, reference to only monetary limits specified U/s 44AB (a) 44AB (b) suggests that in your case TDS is required to be deducted.
This is safer rather than taking a view that accounts were not required to be audited U/s 44AB(a).

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