Tax Query Urgent

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Dear All

My question is related with tax deductin at source.Basic rule of tax deduction under any section is credited or payment whichever is earlier.Situation is that suppose Mr.X rendered service to Mr.Y in Mar'09 and send the bill for service rendered to Mr.Y in June'09.Mr.Y credited Mr.X  in June'09 at paid the tax accordingly.Is Mr. Y postponed his TDS liability because bill for rendering service was not received.Whether we should wait for getting bill to deduct tax or deduct it when the service is rendered even though bill is not received.Please clear my doubt.If anyone has any case law related with my query please let me know.

Replies (3)

As per my opinion

Services are rendered in March so as per Marcantile System liability should be booked in March only whether bill received or not.

Hence TDS liability arise in March only.

Non payment & Non deduction provisions comes into effect.

generally as per the service tax rules the bill should be issued with in 15 days from the date of completion of service.here it is not the case, as  the liabilty arised in the march Tds need to be deducted in the month of march only and it should be deposited on or before due date.

TDS is deductible on credit or payment whichever is earlier. So if your accounting as per merchantile system u have to make a provision for TDS and That TDS has to be paid by 31st May 2009 as per Section 200 regardless of whether amt received or not

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