Lower TDS Certificate

TDS 1946 views 4 replies

Nilesh B

Manager

24 Points Joined October 2010

I have taken lower TDS certificate for deduction of professional fees at lower rate than as per law

Say example I have taken lower TDS certificate for TDS @ 5% for professional fees say up to Rs. 5 lakh.

Then fortunately my professional fees for the same period increase to say Rs. 5.5 lakh

In above situation A) whether lower TDS will be deducted up to 5 lakh & then for balance @ normal rate

B) TDS @ normal rate will be deducted on total amount i.e. Rs.5.5 lakh

I think it is A) while my employer say it is B)

Pls provide feedback with supproting case laws if any you know

Replies (4)

Aditya Maheshwari

CA in Practice

35867 Points Joined June 2009

Lower TDS will be deducted up to 5 lakh & then for balance @ normal rate. It is as per lower deduction certificate only. if u read the certificate you yourself will get the answer.

Manoj Khandelwal

Practice

347 Points Joined August 2009

Aditya is right.

kumarsatish022

Professional

165 Points Joined September 2008

aditya is right

CA Sanjay Jha

ACCOUNTS MANAGER

914 Points Joined January 2009

Hi Nilesh

Normally certificate issued u/s 197 about lower rate of TDS deduction not to be described any limit.

If certificate specially specify limit then no doubt about rate but if not specify then it is not to be our duty to duduct TDs rate more than rate in specify CErtificate.

Second thing when a professional give a declaration to IT department of professional income around 5/- it is not mean that it is not to be increased.

consultancy income not to be exactly calculate before the actual income earned, it variance definetely it is nature of consultancy income.

If u think in prudence method then if a declaration given by profssional exceed by more than 25% then u have two option deduct

1.upto 5lakh 5% and more than 5lakh 10.30

2. Grossly 10.3% because this rate depend only declaration given by profssional and if it violate then Certificate u/s 197 automaticaly violated/quashed.

Just think practicaly.