tds on outstanding or payment
This query is : Resolved
04 March 2009
Sir,
Please solve this query...
One Accountant is deducting TDS of job work on outstanding bill of Rs.500000/- @ 2.060% and deposited the tax accordingly within due date.
Now at the time of payment there is some discounts and claims appeared in picture and Rs.325000/- has been paid by the accountant & deducted TDS accordingly.
What has to be done?
I also want to know that which procedure is legally acceptable by the taxmens as per illustration below.
Bill no. 15 dated 01/04/2008 of Rs. 200000/-
Bill no. 18 dated 03/05/2008 of Rs. 175000/-
Bill no. 35 dated 07/06/2008 of Rs. 265000/-
Total Amt. Rs. 640000/-
The final amount is paid on 08/09/2009 of Rs.589000/- after deducting Rate difference etc.
If I pay tds on above amount @ 2.060 % and deposit it on 07/10/2009, shall it be acceptable
If we pay tds only when we pay finally to the party or we have to pay on outstanding. What is procedure as per law.
Shall we make amendment in the account policies & mention it in our annual return that “We are paying TDS on payment or we are changing from so and so date”
Awaiting your earliest reply.
Thanking you
Please solve this query...
One Accountant is deducting TDS of job work on outstanding bill of Rs.500000/- @ 2.060% and deposited the tax accordingly within due date.
Now at the time of payment there is some discounts and claims appeared in picture and Rs.325000/- has been paid by the accountant & deducted TDS accordingly.
What has to be done?
I also want to know that which procedure is legally acceptable by the taxmens as per illustration below.
Bill no. 15 dated 01/04/2008 of Rs. 200000/-
Bill no. 18 dated 03/05/2008 of Rs. 175000/-
Bill no. 35 dated 07/06/2008 of Rs. 265000/-
Total Amt. Rs. 640000/-
The final amount is paid on 08/09/2009 of Rs.589000/- after deducting Rate difference etc.
If I pay tds on above amount @ 2.060 % and deposit it on 07/10/2009, shall it be acceptable
If we pay tds only when we pay finally to the party or we have to pay on outstanding. What is procedure as per law.
Shall we make amendment in the account policies & mention it in our annual return that “We are paying TDS on payment or we are changing from so and so date”
Awaiting your earliest reply.
Thanking you
04 March 2009
Dear Tribhuwan,
As per the provision u/s 190 to 306C, TDS is to be deducted on:
1. Amount paid, or
2. Account credited, whichever is earlier
and once deducted has to be deposited by 7 month the next month in which it was deducted provided in case deducted on 31st March due date is 31st of AY.
So if you have credited the account of party you have to deduct TDS irrespective of Acutal payment. The allowablity of this payment as expenditure will be in the year in which TDS was deducted. Section 40(a)
As per the provision u/s 190 to 306C, TDS is to be deducted on:
1. Amount paid, or
2. Account credited, whichever is earlier
and once deducted has to be deposited by 7 month the next month in which it was deducted provided in case deducted on 31st March due date is 31st of AY.
So if you have credited the account of party you have to deduct TDS irrespective of Acutal payment. The allowablity of this payment as expenditure will be in the year in which TDS was deducted. Section 40(a)
04 March 2009
Sir,
Thankyou for replying to this.
If you are saying that we have to pay on earlier that is when we credit the bill.
but as we the actual payment appears less what has to be done?
i.e. we have paid tds on Rs. 500000/- as per bill but have deducted tds on Rs. 450000/- considering various claims etc.
It is our loss for which i need clarification.
Thanking you,
Tribhuvan Purohit
Thankyou for replying to this.
If you are saying that we have to pay on earlier that is when we credit the bill.
but as we the actual payment appears less what has to be done?
i.e. we have paid tds on Rs. 500000/- as per bill but have deducted tds on Rs. 450000/- considering various claims etc.
It is our loss for which i need clarification.
Thanking you,
Tribhuvan Purohit
04 March 2009
you have to book it as discount
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