TDS

Yes, it can claim deduction 

but TDS should be deducted entry should be passed in the month of march(i.e.31st march)

but he has to pay the TDS before 30th sept. along with whole intrest upto the date.

YES HE CAN. TDS SHOULD BE PAID BEFORE FILLING INCOME TAX RETURN . TDS CAN BE DUDCTED AT ANY TIME DURNG 2009-10 NOT IN MARCH ONLY.

I hereby suggests you the THREE Options

OPTION: 1
There is a Exception from Deduction of Tax u/s. 194 C if the Assessee is not covered by the Tax Audit in the PRECEEDING PREVIOUS YEAR.

That is if he is not covered by the Tax Audit in the Assessment Year: 2009-10 he neednot to deduct TDS u/s. 194 C in the Previous Year: 2010-11

Just take this advantage if it applies to the Assessee.

OPTION: 2

There was a recent case law which states that disallowance u/s. 40a(ia) is applicable if the Amount is not Paid. That is as on 31st March the Payment to the Contractor should be Paid not Payable (Creditors) in your Books.

In Simple it applies to Amount Payable not to the Amount Paid.

The Fact revealed by

on the grounds of following provision of the section

(ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has. not been deducted or, after deduction, has not been paid,-

OPTION: 3

Otherwise make the Remittance with Interest before Filing the Return.

Hope u understand and take the stand whichever is beneficial to your Assessee

WHAT IS THE RATE OF INTEREST THAT THE FIRM WILL HAVE TO ADD TO TDS TO BE PAID BEFORE 30TH SEP. . WILL IT BE ON ENTIRE AMOUNT OF TDS THAT HAS TO BE PAID? 

YES, INTEREST TO BE PAID @ 1% PER MONTH.