01 March 2012
In F.y 2011-12 one of employee retire on 29th Feb 2012. We have paid salary to him up to Jan 2012. And the salary for Feb 2012 + Leave encahment + gratuity will be paid in next F.y 2012-13 may be in May 2012 or June 12. While considering his tax liability whether we consider his income whole amount payable to him for F.Y 2011-12 though salary for Feb-2012 + Leave encahment + gratuiry not paid and accordingly tax calculateed on whole amount. Or consider income up to Jan 2012 & accordingly tax calculated and Feb-2012 salary & leave encashment + gratuity in next F.y i.e 2012-13 as on paid basis & tax calculated accordingly. Pls guide
01 March 2012
The TDS needs to be deducted in the FY 2011-2012 itself. The rationale behind being that on retirment, the salary for february and other allowances becomes due to him. TDS has to be deducted at time of booking or payment which ever is earlier
01 March 2012
But we will booked the expenses at the time of payment.In that case what is the solution. Pls guide. Because we have financial problem so we release the payment may be after 2 or 4 months.
01 March 2012
You need to make the provision into the books of account. Due to financial problems of the company if the payment is delayed, no problem.
The Tax need to be deducted on actual payment or accrual, whichever is earlier.
Again differing of current year expenses to next year (for any reason) is not a prudence practice and will not save you from deduction of TDS before March 12.
01 March 2012
Shamkat, its best you book the provision in current year itself as u are aware the expnses has to be booked.Increase or Decrease in the provision can be adjusted in the next financial year itself.
02 March 2012
We have to follow practice to make any entry in books at the time of payment. In that case pls explain if we will mak epayment in next f.y then we will make the TDS payment in next F.y. Is the practice is right or wrong. pls guide
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