TDS & Section 40(a)(ia)

This query is : Resolved

SSA JI (Querist)
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27 May 2011 Sir/Madam,

My Client not deducted the tds and made the whole PAYMENT during the previous year , also after making the payment it paid the required amount of tds to the Govt out of pocket and stands that paid amount of tds to the party's ledger from whose account the tds is not deducted .After some time party made that
payment .

Q: Whether Section 40(a)(ia) get attracted or not ?

Q: If the expenses got disallowed , in which year it is allowed ?

Note : the whole above transaction were happened in the same previous year (2010-11)

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 May 2011 As the client had rectified its mistake by making payment of TDS, and if such payment to the Govt has been made on or before the due date of filing of return (of your client), the expenditure will not be disallowed.

However the TDS has been deposited after the due date, the expenditure will be disallowed for the defaulting previous year, but the same will be allowed in the next previous year in which such payment is being made.

VISHAL SHAH

VISHAL SHAH (Expert)
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27 May 2011 as the whole noted transaction were happened in same previous year i.e tds deducted and paid in to government account, no amount is disallowed u/s40(a)(ia). but you are liable to pay interest for late payment of TDS. if interest is not paid, department will asked for interest for delay payment of tds at time of assessment of etds return.

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