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Tax Audit: Allowance of Expenses for which TDS deducted but not paid

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anand achu

32 Points Posted on 23 September 2020

Experts,

A company deducted TDS from an expense on 31st March 2019 but not paid the TDS to IT department till date.

Can the company take the expense as allowable by paying the TDS now by filing return before 30 September 2020.

If it is possible please quote the relevant sections of income tax act.

Thanks in advance

Replies (2)

Quick Summary

This discussion addresses whether a company can claim an expense deduction if TDS was deducted on 31st March 2019 but not paid to the IT department. It clarifies that under Section 40(a)(ia) of the Income Tax Act, the expense is allowable if the TDS is paid by the due date for filing the return of income under Section 139(1).

CA ABHAY GUPTA

Practice

1639 Points Posted on 23 September 2020

Refer section 40a(i)

Shreya Bafna

153 Points Posted on 23 September 2020

Under section 40(a)(ia) of the Act, in case of payments made to resident, the deductor is allowed to claim deduction for payments as expenditure in the previous year of payment, if tax is deducted during the previous year and the same is paid on or before the due date specified for filing of return of income under section 139(1) of the Act.