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Applicability of tds

14 January 2013

Hello Sir and Friends

I want to know that

Is TDS is applicable on provision for expenses in Income Tax Act? Please provide me reliable source matching with your answers.

THANKS IN ADVANCE

REGARDS

AMIT KUMAR PANDEY

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5 Replies

CA Gnanika (CA ) (485 Points)
Replied 14 January 2013

Tds is applicable on accrual or payment basis which ever is earlier.

For ex: in case of rent., irrespective of when you make the payment, provision is made on the month end., & tds has to be deducted on or before 7th of the next month.

Hope its clear now., just let me know if you need any further clarification.

CA AMIT KUMAR PANDEY (Job) (142 Points)
Replied 14 January 2013

Dear Gnanika

But as per TDS provision, TDS is deducted only when payee's accounts is credited or payment made which ever is earlier, but in this case payee's account is not credited or amount is not paid to the payee. How TDS is applicable in this case?

Thank you very much for your reply for my first post.

Please reply me as soon as possible for my second post and please give reliable source.

Regards

AMIT KUMAR PANDEY

CA Gnanika (CA ) (485 Points)
Replied 14 January 2013

Mr Amit., what exactly is your doubt?

Can you please specify what entry u will pass while making a provision entry & pmt entry in case of rent?

Else give any example of your choice.

CA AMIT KUMAR PANDEY (Job) (142 Points)
Replied 14 January 2013

Miss Gnanika

Do you know HINDI? I can understand english but i am not able to frame english sentence fast?

If you know hindi then chat with me in Hindi language. Then I will be able to describe you, what actually is my problem?

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graph) (85935 Points)
Replied 14 January 2013

Tds is applicable on accrual or payment basis which ever is earlier.

For ex: in case of rent., irrespective of when you make the payment, provision is made on the month end., & tds has to be deducted on or before 7th of the next month.