10 March 2010
A co. pays fee of Rs. 50000 to a profssional without deduction TDS. What will be the overall impacts??? Also, what will its effect on the professional's return?
If a company pays professional fees above threshold limit(i.e. Rs.20000/-, proposed Rs.30000/- from 01.07.2010) withoud deduction of TDS the expenses will be disallowed to the company. It will not effect the return of that professional in any manner whatsoever.
10 March 2010
The amount of Rs. 50,000/- will dis allowed in the hand of the company.
It shall be allowed in the year of payment.
The company will be treated as assessee in default and be subjected to recovery of tax along with interest and penalty. However, if it can be proved that the professional has offered the impunged income to tax in his return, only interest will be recoverable.
There is no impact on the professional's return. He shall offer the income of 50K in his return.
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