Tds on salary.

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hitesh (Querist)
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24 April 2014 Dear Prof Bros,
TDS on Salary is deductible on payment basis and not on accrual basis. A co. has not paid salary to its employees due to financial problems.Not deducted TDS. Provision has been made for salary payable.The employee filed return offering salary receivable from co and paid tax himself. In next year co paid the salary dues to employee. Is there any need to deduct TDS by co on payment of salary for which tax is paid by employee? How employee would get tds credit? Would not it be ridiculous or meaningless on part of the co to deduct tds now on payment basis? If co does not deduct tds on payment basis, as auditors what comment to write in 3cd clause? Early solution solicited. Thanks.

Rupesh Jain

Rupesh Jain (Expert)
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24 April 2014 TDS WILL BE DEDUCTABLE ACCURAL OR RECEEIPTS WHICH EVER IS EARLIER.
IF YOU KNOW THAT UNDER INCOME TAX ANY EXP NOT ALLOWED IF YOU ARE NOT DEDCUTING THE TDS.

YOUR CO. ARE NOT DOING AS PER LAW. IF NOT DEDUCTING TDS ON SALARY.

SALARY EXP WILL NOT ALLOWABLE FOR RELATIVE YEAR AS EXP.
IT WHICH YEAR YOU DEDUCT TDS THEN IT ALLOWABLE.

hitesh

hitesh (Querist)
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24 April 2014 Dear Mr. Rupesh,
Extract on FAQ ON SALARY TDS relevant question and answer is as under:
Q.4. When does the liability to deduct tax at source shall arise u/s 192?
A.4. Liability to deduct tax at source shall arise at the time of actual payment of salary and not at the time of accrual.
In view of the above what are your comments?

Rupesh Jain

Rupesh Jain (Expert)
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24 April 2014 YES THIS IS RIGHT THAT UNDER SECTION 192 TDS WILL DEDUCT WHEN ACTUAL PAYMENT MADE.

BUT AS A BUSINESS YOUR EXP. NOT ALLOWED TILL YOU NOT DEDUTE THE TDS ON EXP.

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