TDS on Incentives to Staff

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RAJU CHANDAK (Querist)

29 April 2009 We are creating a provision in the books of the Company as on 31.03.2009 on lumpsum basis towards incentives payable to all Sales Executives (our employees). The actual amount is ascertained and paid at the later date say for eg 28.04.2009 to Sales executives. My question is when the Co should deduct TDS... becuase in case of salary TDS should be deducted within 7 days of the following month in which payment of salary is made....In which year shall I consider the incentives while computing tax for the sale executive...u/s 192..

Rajesh Kumar

Rajesh Kumar (Expert)

30 April 2009 TDS is to be deducted when payment is made or booked. At this time mere provision is being made. No TDS is to be deducted at this time.

taxindiaconnect

taxindiaconnect (Expert)

30 April 2009 The TDS provision are applicable on the payment or creadit to the account of the payee which ever is ealier for all other sections of the chpter XVII of IT Act dealing with the deduction of Tax at source except u/s 192 where the obligation start from the date of payment and not on the provision for saalary. The incentive is also a part of the salary, hence in this case please deduct TDS only at the time of paymemt of incentive.

RAJU CHANDAK

RAJU CHANDAK (Querist)

30 April 2009 Thanks a lot to both of u.

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