Whether TDS is required to deducted on Capital expenditure.

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Sagar

Sagar (Querist)
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06 July 2010 Whether TDS is required to deducted on expenditure if expenditure is in the nature of capital expenditure.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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06 July 2010 Yes, TDS will be deducted even if expenditure nature is capital .
for example. A buidling contractor builds factory building for company. It will be captilzed, but tds will be deducted on service bill of builder.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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06 July 2010 AGREE WITH EXPERT. BUT IF CAPITAL EXPENDITURE IS IN THE NATURE OF ACQUISITION OF ASSETS TDS WILL NOT BE DEDUCTED ON SAME. ONLY CAPITAL EXPENDITURE SUCH AS ERECTION CHARGES, FREIGHT, SERVICE BILL ON CONSTRUCTION OF BUILDING, ETC ATTRACTS TDS.

sivadas chettoor

sivadas chettoor (Expert)
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06 July 2010 TDS is applicable while making payments to certain categories of persons. If you look into the payments most of them are revenue in nature but as per Section 194C even the capital payments are subject to TDS, may be on the ground that the contractor on receipt of the same may be made liable to pay tax and the law makers wish to catch hold of the revenue at the earliest point of time.

siva208@yahoo.com

Akhil Agrawal

Akhil Agrawal (Expert)
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07 July 2010 i will like to ask one thing in here,

if TDS is not deducted then u/s 40(a)will the depn be disllowed & if it is disallowed, then it has to be done each yr as deppn will b charged each yr.

Also what will be the scenario if the company is at the stage of before commencement of Business.

Kishen K Warrier

Kishen K Warrier (Expert)
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07 July 2010 No disallowance u/s 40(a) for depreciation.The disallowance is on the expenditure dr to p/l and on which no Tax is deducted.In case of Fixed Assets ,no direct debit to Profit and Loass Account.

If company is at the stage of before commencement of Business,still TDS to be deducted

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