Tds on account of foreclosure of fd
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 December 2011
What will the effect on deduction of TDS in case of foreclosure of FD as negative interest will be debited to holder's account?
Further on which amount TDS will be deducted and paid?
e.g. when TDS on Interest amount has been deducted in the first quarter however afterwards in second quarter, negative interest will flow due to foreclosure. Whether TDS can be reversed on net interest?
Please help me resolving the same.
Further on which amount TDS will be deducted and paid?
e.g. when TDS on Interest amount has been deducted in the first quarter however afterwards in second quarter, negative interest will flow due to foreclosure. Whether TDS can be reversed on net interest?
Please help me resolving the same.
03 December 2011
It is not clear from your query -whether TDS deducted has been deposited in case of Ist Quarter.
.
Suppose Interest of Q1 is 16000. TDS is 1600.
.
Due to Foreclosure interest of Q2 is -3000.
.
As you are paying net Interest of Rs. 13000/- only Reqd TDS is Rs 1300/- only.
.
However , as you have deducted TDS but, it
is observed that TDS has not been deposited, Bank has to bear the interest on late payment.
.
This interest has to be borne by the bank and not by the constituent.
.
.
Suppose Interest of Q1 is 16000. TDS is 1600.
.
Due to Foreclosure interest of Q2 is -3000.
.
As you are paying net Interest of Rs. 13000/- only Reqd TDS is Rs 1300/- only.
.
However , as you have deducted TDS but, it
is observed that TDS has not been deposited, Bank has to bear the interest on late payment.
.
This interest has to be borne by the bank and not by the constituent.
.
Message likes :
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04 December 2011
Just now I have come across a case law which is reproduced below-
"Once Tax is deducted at source, Amount becomes money due to Central Government and either deductor or deductee cannot appropriate amount so deducted on any ground. This had been decided in the case of ITO (TDS) v India Vision Satellite Communication Limited 7 taxmann.com 65."
In the light of the above case, adjustment of tax amount is not possible and the deductor is required to deposit the whole amount of tax.
As such on negative interest , TDS amount can not be adjusted.
"Once Tax is deducted at source, Amount becomes money due to Central Government and either deductor or deductee cannot appropriate amount so deducted on any ground. This had been decided in the case of ITO (TDS) v India Vision Satellite Communication Limited 7 taxmann.com 65."
In the light of the above case, adjustment of tax amount is not possible and the deductor is required to deposit the whole amount of tax.
As such on negative interest , TDS amount can not be adjusted.
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