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TDS on expenses provided at the year end

Kannan (Company Secretary) (168 Points)

23 October 2011

TDS can be remitted upto 30th April for all expenses provided as on 31st March of a year. However, the companies may close thier final accounts for a year latest by say 31st August (conisdering the last date of consideration of account as 30th September in the AGM). At the time of finalisation of accounts say on 31st August, the statutory auditors make a provision for an expenditure item, involving TDS. Under such circumstances, when TDS is to be remitted? Will it attract any interest?

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3 Replies

Akhil Sharma (Service) (141 Points)
Replied 23 October 2011

Dear Kannan,

Interest is payable on TDS u/s 201(1A) of Income Tax Act, 1961 @ 1.5% p.m. from the date of deduction till date of deposit. Inythis case from April to August in case TDS is remitted in August itself.

Rajesh Khanna (Senior Manager Finance) (57 Points)
Replied 23 October 2011

Dear Kannan

As per rule no 30 of the IT rules, TDS has to be paid within 7 days from the end of the month in which the deduction take place (or the income tax is due under section 192(1). Considering the current discussion, the TDS on the provision for expenses made during March of any financial year is only allowed to be paid before 30th April. Hence any provision made during August closing needs to be paid on or before 7th of September.

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s (-) (216 Points)
Replied 23 October 2011

Financial Year for the purposes of Income Tax Act, 1961 and rules made thereunder is

APRIL 1 TO MARCH 31.

Time limit of 1 month i.e. upto April 30 is available only for the month of MARCH and not for LAST month per se.

Even if the FY for the company is ending on August, the Due date of Payment of TDS for the provisions made on August 31 will be SEPTEMBER 7.

NOTE: you will also have to make a reconciliation statement, as Previous year for Income tax purposes is April 1 to March 31. Also you will have to consider Provisions of MAT,etc.

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