Doubt sec 40a(ia)

CA Babit Khurana (learning is my passion) (338 Points)

20 April 2010  

As per section 40a(ia) payment  of  cousulting fee made to resident or non resident without deduction of tds is disallowed.

My Queries

Q1- Suppose a person have to deduct tax on payment of consulting fee to resident of india, but failed to to do so later ITD issued notice that you have to deduct and pay tax on such payment. That person without deduction of tax pay the necessary  amount out of his pocket as Tds now can he claim deduction of expeniture on which tds should be deducted.

Q2 IS deduction and deposit both are necessary to claim deduction of expenditure under setion 40a(ia) of IT Act,1961.

Pl give ref to support your answer.

Thanks in advance