TDS Query
This query is : Resolved
28 January 2020
For EG: Mr. A pays rent and repairs and maintenance charges to Mr. B and he is covered in audit u/s 44AB. The payment exceeds the limits of TDS but however Mr. A failed to deduct TDS and made full payments to Mr. B. This continued for 10 months and if now if Mr. A pays the TDS to government it will create huge deposit of TDS along with interest.
If Mr. B shows the full amount of rent received and fees for repairs and maintenance in its Total income & pays tax on the same than as per the following wordings of sec 201 can Mr. A submit certificate and not deduct TDS ??
A deductor who fails to deduct the whole or any part of the tax on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee-in-default in respect of such tax if such resident—
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the deductor furnishes a certificate to this effect in Form No.26A from a chartered accountant.
PS. Mr. B is wiling to pay tax on total income including rent & repairs/maintenance fees.
If Mr. B shows the full amount of rent received and fees for repairs and maintenance in its Total income & pays tax on the same than as per the following wordings of sec 201 can Mr. A submit certificate and not deduct TDS ??
A deductor who fails to deduct the whole or any part of the tax on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee-in-default in respect of such tax if such resident—
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the deductor furnishes a certificate to this effect in Form No.26A from a chartered accountant.
PS. Mr. B is wiling to pay tax on total income including rent & repairs/maintenance fees.
28 January 2020
TDS short deduction may be made good in fourth quarter remittance with interest.
Option of 26A certificate also available for failure to deduct tax.
Option of 26A certificate also available for failure to deduct tax.
28 January 2020
deductor has failed to deduct & deposit to tds to government and does not want to pay in Q4 as the liability is huge and deductee agrees to pay tax on such payment and show the same in his total income. Hence deductor wants to go for 26A certificate, Can he ?? Will there be any consequence as deductor is covered in audit ?
28 January 2020
No consequences if 26A filed online no problem in tax audit.
29 January 2020
Thankyou sir for your response.
I have one more query which is very similar to the above case.
In this case Mr. A has failed to deduct & deposit TDS till october and for Nov & Dec deducted & deposited TDS to govt. Now if he wants to make good for Apr-Oct huge liability of tax & interest arises so Mr. A wishes to use option of Form 26A.
Can Mr. A use option of Form 26A as he has deducted tds for only 2 months and does not want to pay for earlier months and also for the future months. Deductor has made the full payments and deductee will reflect the amt in its total income & will pay tax. Therefore conditions of sec 201 is satisfied.
I have one more query which is very similar to the above case.
In this case Mr. A has failed to deduct & deposit TDS till october and for Nov & Dec deducted & deposited TDS to govt. Now if he wants to make good for Apr-Oct huge liability of tax & interest arises so Mr. A wishes to use option of Form 26A.
Can Mr. A use option of Form 26A as he has deducted tds for only 2 months and does not want to pay for earlier months and also for the future months. Deductor has made the full payments and deductee will reflect the amt in its total income & will pay tax. Therefore conditions of sec 201 is satisfied.
29 January 2020
Yes it will be satisfied.
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