NON DEDUCTION OF TDS ON CAPITAL EXPENDITURE

Dear Experts,

What are the consequences of non deduction of TDS on capital expenditure.....
Replies (8)

Payment made without deduction of TDS is not allowed to add in Cost of Capital Asset as per Income Tax Act. 

Sir,
Can u please explain it In brief
No disallowance u/s 40(a) for depreciation.The disallowance is on the expenditure dr to p/l and on which no Tax is deducted.In case of Fixed Assets ,no direct debit to Profit and Loass Account. 
IF CAPITAL EXPENDITURE IS IN THE NATURE OF ACQUISITION OF ASSETS TDS WILL NOT BE DEDUCTED ON SAME. ONLY CAPITAL EXPENDITURE SUCH AS ERECTION CHARGES, FREIGHT, SERVICE BILL ON CONSTRUCTION OF BUILDING, ETC ATTRACTS TDS

It is very obvious TDS is applicable only on service and contracts, not on goods whether capital in nature or revenue in nature. 

TDS is applicable on other than goods part of capital expenditure. 

Sir,

To be clear

I didn't deducted tds on service taken for interior decoration..

What are the consequences...

for example machine purchased 500000 Service of installation etc 150000 TDS applicable U/S 194C

TDS not deducted on 150000 installation service part

Cost of Machine is as per income tax act 500000 without including 150000 service part on which TDS not deducted. 

In block of plant & machine only 500000 will include as per income tax act

Thanks a lot sir....................m

But still it can be shown as a revenue expenditure right and it shall suffer dis-allowance to the extent of 30% under sec 40(a)(ia) of IT act 1961. 

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