What is TAN? Do i need to file TDS Returns? (TDS Issue)

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S Mohammed (Querist)
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08 February 2009 I had started my New Business (Works Contract) in the month of September and as per the advice received from my accountant, i had applied for TAN and the same was issued to me on 25th SEP 2008.

But the problem is that neither me nor my accountant doesn't know for what all the TDS are Collected. We Directly appoint Painters,electricians,false ceiling workers & Vinyl flooring workers on contract basis and not on daily labour. And as on date we had paid around 40 Lakhs rupees only for these contract labours.Till date we had not collected any TDS from anyone. And all these amounts were disbursed by Cash Voucher.

My question is what is TDS...? If i have a TDS Number do i need to File TDS returns even i have not collected even a penny towards TDS (I Mean Should i need to file a Nil return...????) and lastly from whom all i need to collect TDS...

Please help me to resolve this issue...as i am really i need of a good person to suggest me the right business rules...

S Mohammed

S Mohammed (Querist)
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08 February 2009 Please Help me at the earliest.........

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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08 February 2009 Yes. Once you get tds number you have to file quarterly returns. If tds is not there then you have to file nil returns.

In your case you are telling you have paid Rs.40 Lakhs to different persons. You please insist your accountant take the list of persons and the cumulative amount paid to them. Then chcek with tds under contracts. ie. Each payment more than 20000 or cumulative to each person is more than 50000 will attract tds.

The backlog you have to regularise it by paying the interest. Otherwise entire expenditure will be disallowed and you will face problem heavily.

Kindly ask your accountant to attend the same. If you find any diffculty please write to me to my mail id sahanaseena@gmial.com I will help you if you require.

S Mohammed

S Mohammed (Querist)
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08 February 2009 Sir....Please explain me the term "backlog". And please explain for what i have to pay the Interest?

S Mohammed

S Mohammed (Querist)
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08 February 2009 One more question.........If i had to collect TDS from the contract labours ... Whose single payment is more than 20000 and the cumulative payment is more than 50000 what is the percentage of TDS to be collected from the them.
Please advice...........

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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09 February 2009 The percentage of TDS is 2% and cess 2% and 1% on tds. If the payment exceeds 10Lakhs then you have to pay surcharge on tds at 10% on tds and cess at 2% and 1%.

As per the income tax act you are supposed to deduct the tds on the day of payment or on the day of credit to accounts whichever is earlier.

In your case you are telling you have already made payements, for those payments if tds is applicable i am calling it as backlog and suggesting you to regularise it. Further for delay in payment of tds you have to pay interest.

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