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TDS Rate on Invoice dated April'20 but received in May'20

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This query is : Resolved

Abhiz (Querist)

28 July 2020 Dear All,

Our office closed on March 25th due to COVID 9 pandemic and reopened on 20th May 2020. We have received an invoice on security service which is dated 01/04/2020 (expense for Mar'2020). Usually we are deducting TDS @ 2% under sec 194 C . My query is, new TDS rates which came to effect on 14th May 2020 is applicable on this case?.

Whether we have to deduct 2% or 1.5% ? New rates applicable on the basis of invoice date or invoice received date?

Kindly advise.

Thanks in advance

CA KARAN SINGH

CA KARAN SINGH (Expert)

28 July 2020 It depends upon the date of the booking expense in the books of accounts. if you book that expenditure on and before 13/05/2020, then the old rate will apply, or if expense booked after 13/05/2020 (usually in the case of cash basis of accounting) then the new rate will apply.

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