Default in deduction of TDS on salaries

11753 views 9 replies

FATEMA

CHARTERED ACCOUNTANT

719 Points Posted on 14 March 2011

Dear all,

My client did not deduct TDS on salaries for one of his employee.That employee paid last installment of advance tax a day before.Client committed a default in deduction of TDS.I want to know that will salary for that particular employee will be allowed as expenditure because that employee has already paid the advance tax?Shall we pay the interest which is due to delay in payment of tax deduction at source?

Regards,

Fatema.

Replies (9)

U S Sharma

glidor@gmail.com

21068 Points Posted on 14 March 2011

disallowance for non deduction of TDS does not works for salary payments, hence allowed.

Pankaj Arora

Learner

3134 Points Posted on 14 March 2011

yes tds not deducted on salary will not disallowed u/s 40a(ia)

FATEMA

CHARTERED ACCOUNTANT

719 Points Posted on 14 March 2011

so we are not suppose to take any action for the default...right?

CA SHRIPAL LUNIYA

CA CS Final & M.Com

744 Points Posted on 14 March 2011

Disallownce u/s 40a(ia) is not giving any effect on Salary so salary payment is allowed as expenditure.

CA SHRIPAL LUNIYA

CA CS Final & M.Com

744 Points Posted on 14 March 2011

Originally posted by : FATEMA
	so we are not suppose to take any action for the default...right?

yaa right

CA Surya Kumari

17 Points Posted on 14 March 2011

Yes, Sec 40(a)(ia) does not operate in respect of salary payments and non deduction thereon. Only if salary is payable outside India or to a non resident and tax on that has not been deducted , will be a disallowable expenditure.

Anila

Article Assistant

177 Points Posted on 14 March 2011

Originally posted by : CA Surya Kumari
	Yes, Sec 40(a)(ia) does not operate in respect of salary payments and non deduction thereon. Only if salary is payable outside India or to a non resident and tax on that has not been deducted , will be a disallowable expenditure.

Ranjeeth Balasundaram

41 Points Posted on 28 March 2011

Dissallowances nexus wont creat but as per TDS provision employer be termed as Assesee in Default penalty & Interest for non compliances can be charged from the TDS angle .

Murtaza I Bhagat

Tax & Finance Consultant

10533 Points Posted on 28 March 2011

Dept. has very much sure about some mistakes like non deduction or less deduction from salary its possible but its not means that salary receiver default in tds deduction & expenditure.....

salaried person have to pay tds in regular installments.......as advance tax.....if he/she didn't pay then he has to pay int. u/s 234B,C......of advance tax... but if deductor forgot to deduct full tds...then salaried person has to pay that tds amt as self assessment tax after march.....

Thus, disallowed u/s 40 (ia) not affact to salaried employee