Tds on monthly expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 Dear Experts,

Can you clarify on the following:

Expenses like House Keeping, Security,Bus hire charges etc( Where 194 C applicable) for the Months of Dec'12 Jan'13, has been accounted in Mar'13. ( Due to non receipt of Bills and other operational problem)

TDS on the same has been Deducted in mar'13 & Paid in before of 7th Apr'13.

Now Is there any default on my part as i have not deducted/Paid TDS in Feb'13 as we have to maintain books as per the accrual basis of accounting.

Should i TDS along with interest if Yes ? how much 1.5% or 1%.

Ganeshbabu K

Ganeshbabu K (Expert)
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25 June 2013 1)on what date you have credited payee account in books for Dec,Jan...if it is march yes there is no mistake and no interest will be applicable here.(to do like that you should have bills dated march)

2)for expenses of february and march you have to provide provision for expences..

so as and when you created provision for expences you need to pay tds on provision for expences...so for this amount you need to pay tds with interest

so interest for 3 months will be applicable for feb, and march provision for expences

Thanks & regards
Ganesh babu k

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 Thanks Ganesh for your reply.

1) For Dec'12 & Jan'13 expenses have been accounted in Mar'13( with bill date Dec'12, Jan'13 respectively)

Should i defaulted by not paying interest on TDS?

2) For Feb'13 & Mar'13 i have not created any provisions. However in the month of Apr'13 expenses accounted with back dated i.e 31st Mar'13( both Feb'13 & Mar'13 and TDS paid on 7th Apr'13)

Is there any better accounting treatment and improvement to comply the Income Tax Act.

Regards

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Ganeshbabu K

Ganeshbabu K (Expert)
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25 June 2013 1)So it means that you have credited payee account in dec and jan so you need to pay tds on it on jan7 and feb7 respectively so you would have pay tds wih interest here.so yes here interest defaulted.

2)as you booked expences for feb and march in march only and tds also deposited before 30th april so there is no default here

But to book expense like this you should have invoice dated march only...

Thanks & regards
Ganesh babu k