TDS On prior period expenses

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Anwar Shaikh (Querist)

28 April 2011 Dear experts,

if a company pays professional fees for F.y. 2009-10 on 30.06.11 for which no provision was made on 31.03.10 & 31.03.11.

Now my question is as this fees is prior period expenses and already dissallowed, is it necessary to deduct t.d.s ?

CA Navin Jain

CA Navin Jain (Expert)

28 April 2011 YES, FEES IS PRIOR PERIOD EXPENSES AND ALREADY DISALLOWED,

BUT Assessee would be penalize if tds not deducted

Penalties for Failure to Deduct and Deposit TDS

Failure to Deduct TDS
If a person fails to deduct the whole or any part of TDS as required under any of the provisions of sections 192 to 196D then:
(a) The person responsible for deduction is treated as ‘assessee in default’
(b) He shall be liable to pay by way of penalty a sum equal to the amount which he failed to deduct.
(c) He shall be liable to pay simple interest @12% p.a. on amount of tax liable to be deducted.

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