TDS on adhoc provision at the year end

This query is : Resolved

Pradip B Vaidya (Querist)
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17 October 2007 We have made the adhoc provison on meracantile basis for various expenses for the year ending march 07 .
No TDS was deducted on such provision being adhoc .
Actual bills will be booked in the current year and provisions will be reversed . we intent to disallow the expenditure in computing the taxable income for as no tds deducted on such a expenditure .
Pl advise best option available to overcome TDS penal provison and how to incorporate the same in Tax audit report .

Sandeep Diwan

Sandeep Diwan (Expert)
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17 October 2007 As per the IT TDS has to be decucted either on payment or at the time of booking of expense.TDS has to be provided on any expense booked at the year end on provisional basis. Such TDS has to be depsoit by 31st May the following Year.So two month time is available to collect actual bills.In absence of this the any such provision for expense disallowed.

Suresh Agrawal

Suresh Agrawal (Expert)
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17 October 2007 Now, in order to escape the TDS penal provisions you can deposit the TDS amount alongwith an interest from 31st March 07 till the date of deposit.
Disallowance under IT Act cannot be avoided now.

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