FY 18-19 forgot to deduct TDS on contract. What are the tax implications?
FY 18-19 forgot to deduct TDS on contract. What are the tax implications?
In case the Financial statements have not yet been finalized, then you can deduct TDS and deposit on or before 30th April, 2019. This is assuming the invoice on which TDS is to be deducted pertains to March'19.
In any other case, you will have to deduct TDS now and pay. Interest will be levied u/s 201(1A) @ 1% per month from the month it was deductible to the month it was deducted.
If this is not done, then 30% of the said expenses will have to be disallowed in the current year Income Tax Return.
In case you proceed to never deduct TDS in the future, you may have to prove the TDS officer the reasons for such non deduction or prove to the officer that the other person has offered that income to tax and it has been duly paid.
In case you are unable to prove that to the TDS officer, you may be conisdered as an "Assessee in Default" and seperate proceedings may initiate. This will depend upon the quantum involved.
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