TDS on advance payment

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This query is : Resolved

Guest

Guest (Querist)

12 June 2008 Can advance payment to a supplier is eligible for TDS.

What should we do if the supplier return back the amount with a bill which was not falling in limit of TDS

for Example we paid advance of Rs. 25000/-to supplier 'X', with deduction of TDS (Rs. 515/-).

After some time Mr. 'X' has submitt his bill of Rs. 15000/- and return back the bal amount (Rs.9485/-)

what will be the status?

Please advise

Thanks

Rajesh

Shyam Lal Naik

Shyam Lal Naik (Expert)
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12 June 2008 You will have to deduct tds as mentioned by you in the example.

The amt of tds should be recovered from the deductee(supplier).

Since the advance payment exceeds the threshhold limit, the transaction is hit by tds provision. Whether the actual transaction is above or below the limit is not relevant.

AMIT DOSHI

AMIT DOSHI (Expert)
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12 June 2008 i completely agree with Mr Naik

C.A Rohit Gambhir

C.A Rohit Gambhir (Expert)
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12 June 2008 TDS needs to be deducted on the payment or at the time of credit to the account of payee whichever is earlier. Therefore on Advance Payments also you need to deduct & deposit TDS

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