Hello,
My doubt is if a company gives salary advance to employee on say 10% interest and company is receiving interest earned then whether any TDS is involved in this situation?
surya
ravi kiran (student) (151 Points)
16 November 2010Hello,
My doubt is if a company gives salary advance to employee on say 10% interest and company is receiving interest earned then whether any TDS is involved in this situation?
surya
Vinay Raja
(student-IPCC)
(704 Points)
Replied 29 November 2010
NO
advace salary is different form advance against salary.
Advance salary is treated as salary as it is taxable on receipt or due basis whichever is earlier.
Advace against salary is not treated as salary, it is treated as loan.
No TDS applies for that advace against salary.
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 29 November 2010
The obligation to deduct tax u/s.192 arises only when there is an obligation on the part of the recipient to pay tax under the head Salary.(As per CIT vs COROMANDEL FERTILISERS LTD. (1984)187 ITR 673 (AP) case)
Advance salary is taxable, but loan or advance against salary is not taxable. Hence, TDS need not be deducted
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 29 November 2010
Very Nice Clarification with good Explanation
Agree with Muguntha sir & Vinay.
CAclubindia
