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Whether TDS Applicable?

19 October 2018

In A.Y. 2017-18, my turnover was 1.80 crores and i had opted for presumptive income under section 44AD @ 8%. Now in A.Y. 2018-19, my turnover is LESS THAN 1 CRORE and opted 44AD @ 8%. in such case whether TDS required to be deducted from A.Y. 2018-19 and onwards.

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11 Replies

RAJA P M ("Do the Right Thing...!!!") (127463 Points)
Replied 19 October 2018

No need.. .. ..

rahul (a) (1620 Points)
Replied 19 October 2018

no..............

Aliasgar Samniwala (118 Points)
Replied 19 October 2018

why TDS is not applicable?

Rakesh Joshi (CA Final) (1272 Points)
Replied 19 October 2018

TDS is applicable on nature of payment and not on the basis of turnover.

rahul (a) (1620 Points)
Replied 19 October 2018

Section 44AB of the Income tax Act makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed one crore rupees. However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees. The higher threshold for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD. I would also like to quote section 194A in bare act language so it can be open for proper interpretation. "Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section." Hence Section 44AD only specifies that if turnover is below 2 crores and assessee is opting for presumptive taxation, audit u/s 44AB will not be required. However TDS Section 194A makes clear reference to turnover limit specified in 44AB for its applicability. Since turnover limit u/s 44AB is still 1 crore, TDS deduction will be required if turnover exceeds 1 crore.

govind (Student CA IPC / IPCC) (38 Points)
Replied 19 October 2018

Yes you need to deduct TDS because limit of tax audit under sec 44AB is still 1crore. even if you opt for 44AD it will not relieve you from obligation to deduct TDS.

RAJA P M ("Do the Right Thing...!!!") (127463 Points)
Replied 19 October 2018

(why TDS is not applicable?)

Bcoz, Your accounts can't Audited...
Bcoz, You are filed u/s 44ad...

Aliasgar Samniwala (118 Points)
Replied 20 October 2018

#rahul

I Agree with whole the explaination. I know that once a T/O exceed 1cr/50L TDS liability arise. but my question is, In succeding/next year, i have to deduct TDS? if my T/O is less than 1cr/50L.

kindly explain!

RAJA P M ("Do the Right Thing...!!!") (127463 Points)
Replied 20 October 2018

Dear.,

Your account audited in Py then You must deduct TDS in CY if T/O less than 1cr...

But, As per the 1st query with it's details "No need to Deduct TDS" n CY.

Sagar Devani (Corporate and International Taxation) (1174 Points)
Replied 20 October 2018

In my opinion TDS should not be deducted. But, since this is a bit of letigative thing, approaching a conservative approach you should deduct TDS.

govind (Student CA IPC / IPCC) (38 Points)
Replied 20 October 2018

yes TDS deduction liability is based on previous year TO
Current year current is not relevant.
if ur current year TO is less than 1cr u need not deduct TDS next year