TDS provision

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Ravi Kumar Rajgaria (Querist)

22 May 2008 I have a confusion....
On Sep, 2007 in AGM, M/s X & Co, is appointed as auditor till next AGM. Bal. Sheet is going to be finalized for 31.03.2008.Assume Prov for Audit fee will be Rs. 50000/- but not yet finalised.On 31.03.2008 Provision is made in books on estimate basis:
Audit fee Dr. 50000
To Prov. for Audit Fee 50000
Is it perfect?or TDS have to deduct here?

Is it compusory to deduct TDS on 31.03.08 or we should wait till audit completion and receiving of Audit Bill.
Let assume Bill received on 10.08.08 then on that date we will booked X & Co. as creditor and deduct the TDS on that date.
Am I right?

CA Hemant T Dewani

CA Hemant T Dewani (Expert)

22 May 2008 if provision is made then you will deduct tax & paid before 31/05/2008 otherwise it is disallowed if you are waiting of auditors bill then exp are allowed in the year when you are paying the bills

Ravi Kumar Rajgaria

Ravi Kumar Rajgaria (Querist)

22 May 2008 Sir,
Let assume Audit fee is not finaslised till March, 2008 then can we deduct TDS on audit fee decided on estimate basis?
Let also assume we change the auditors on July, 2008 and get audit the books from others and file the TDS return on JUne, 2008?

Shyam Lal Naik

Shyam Lal Naik (Expert)

22 May 2008 TDS has to be deducted. TDS is required to be deducted either on payment or credit which ever is earlier. TDS is to be deducted even if the amount is credited to intermediate account/suspense a/c.

Change of auditor is of no relevance to decide applicability of TDS.

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