TDS requirement
This query is : Resolved
17 December 2009
dear sir
supposing that a deductor has failed to deduct tax from professional fees paid - but later on when the deductor got the idea that the fees so paid will be disallowed u/s 40(a)(ia) he asked the deductee to pay back 10 per cent so that he may remit it to credit of govt and issue a Form 16A - but the deductee said that he had already filed his IT Return and paid the tax due and so no requirement of deduction - under such circumstances what will be the attitude of the AO while assessing the deductor - will he go for addition u/s 40(a)(ia) and ask the deductor(assessee) to deduct the said amount and claim it in subsequent year? Again if the deductor ie assessee deducts the amount in later year ie beyond the time allowed for completion of assessment how can the deductee claim it ?
supposing that a deductor has failed to deduct tax from professional fees paid - but later on when the deductor got the idea that the fees so paid will be disallowed u/s 40(a)(ia) he asked the deductee to pay back 10 per cent so that he may remit it to credit of govt and issue a Form 16A - but the deductee said that he had already filed his IT Return and paid the tax due and so no requirement of deduction - under such circumstances what will be the attitude of the AO while assessing the deductor - will he go for addition u/s 40(a)(ia) and ask the deductor(assessee) to deduct the said amount and claim it in subsequent year? Again if the deductor ie assessee deducts the amount in later year ie beyond the time allowed for completion of assessment how can the deductee claim it ?
17 December 2009
The AO will disallow that expenses u/s 40(a)(ia) of the Income Tax Act. The deductee can submit the TDS certificate to his AO within 2 years from the end of the assessment year.
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