TDS paid out of pocket

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This query is : Resolved

CA. Tarun Navlani (Querist)

04 February 2009 A particular transaction is subject to TDS on which the TDS has been deducted but mistakenly whole amount is paid to the recepient. If assessee pays the TDS out of his own pocket without recovering the same from the recepient, whether he will be allowed deduction for it? (Kindly give ref. of relevant sec. no as well)

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

04 February 2009 The department wants the tds on particular transaction. Whether the money belongs to you are the deductee or you have borrowed from others will not be considered. However the shortage deducted will be loss to your company.

CA. Tarun Navlani

CA. Tarun Navlani (Querist)

04 February 2009 Thank you so much sir.
I agree that it is a loss to the assessee. But my question is whether the same will be allowed as deduction under any provision of IT Act?

VINAYAK D PRABHU

VINAYAK D PRABHU (Expert)

04 February 2009 Hi,
You can pay TDS from your pocket, no problem with that, and the party can claim also with your certificate. But u need to book under Miscellaneous expenses the amount u paid as TDS. And you will be allowed deduction for that amount.But it is always advisable not to pay the full amount to the recipient if TDS is attractable.
The party will be definitely allowed deduction because you are paying TDS under his name.

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