Disallowance of TDS late payment

Page no : 2

nikhil bapat (CA) (212 Points)
Replied 02 January 2010

Exp will not be disallowed so long as the TDS deductible thereon has been fully deducted and paid to govt before due date for furnishing the return of income.

Assessee will have to pay simple interest on late payment of TDS @ 1% p.m. However, exp will not be disallowed even if such int has not been paid before the said due date provided TDS has been fully paid

Even if the part of TDS remains unpaid as on the said due date the entire exp will be disallowed

Atul Kumar (Article) (54 Points)
Replied 04 June 2010

I want to know "whether interest paid on late deposit of TDS is allowable as expenseor not''

sonal (accounts) (90 Points)
Replied 06 September 2010

IF tDS FOR THE bills of jan, feb and march 2010 is paid in september 2010, before filing of return for 2009-10, what will be the penal interest? will the bills of feb and march , for which TDS is paid in september allowed as an expense?

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 06 September 2010

HI DEAR,

IT WILL NOT BE DISALLOWED UNDER SEC 40(a)(ia) PROVIDED DEDUCTOR HAS TO REMIT TOTAL AMOUNT BEFORE 31ST MARCH, 2010 FOR THE DEDUCTION UPTO FEBRUARY MONTH..

FOR MARCH, U HAVE THE TIME TO DEPOSIT THE SAME ON OR BEFORE DUE DATE OF FURNISHING THE RETURN, IN ORDER TO AVOID DISALLOWANCE.

FURTHER, AS PER THE FINANCE ACT, 2010 APPLICABLE FOR FY 2010-2011, SECTION 40(a)(ia) WOULD NOT BE COME INTO EFFECT IF U MAY DEPOSIT THE TDS DEDUCTED DURING THE F. YEAR CONCERNED, ANY TIME BEFORE THE DUE DATE OF FURNISHING OF RETURN.

SO IN THIS YEAR ONWARDS, U MAY DEPOSIT TDS FOR APRIL TO MARCH ON OR BEFORE DUE DATE OF FURNISHING OF RETURN. HOWEVER THIS LATE PAYMENT IS SUBJECT TO PENAL INTEREST AND NO DEDUCTION IS AVAILABLE OF THAT PENAL INTEREST AS EXPENSES.

REGARDS,

MANOJ

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