TDS 94C

for more clarity, i tell everyone tht i hv joined the company a week earlier and i found this point really interesting as what should be done now bcoz i know the company has done a mistake by treating it as a contract and deducting TDS thron

Please refer Section 40(ia) for allowance and disallowance.

and if u have deducted the TDS wrongly then just give the party the form 16A.

I just gave the answer of your Query, didnt feel the need of reading previous discussions, if u'll tell me the exact problem in one post i can definately help u.

Now i read your query again. if u have not deducted the tax and paid the entire amount then u can claim the expense in next year. for example bill is of Rs. 100 and u have paid whole Rs. 100 on which TDS rs . 2 is deductible then u can not claim it in current year. but if u have deducted the Rs. 2 and pay it before 30th Sept u can claim deduction in current year. again if u have paid the amout Rs. 98 this means u have deducted the TDS and u can put entry on 31st march. the thing is that u have deducted TDS or not. and if deducted then deducted full or not.  One thing i want to know, party have provided u seperate bill or not?

if yes whats the amount and have they charged service tax or not? then i can help u better. another thing, u have to capitalize the installation amount as the expense is to bring asset in current working position. Please clearyfy the query. Give the whole instance. This all depends on judgement after that

Now give them the form 16A, Simple.

Has your boss realised his mistake?

party gave two bills

one for the cost of furniture purchased and chrgd CST

another for installaion chrgs and chrgd service tax.

 Whats the amount of the respective bill?

I would like to correct people here. It is not necessary to have seprate bills for purchase of material and labour charges but the important thing is that material amount should be seprately mentioned in the bill.

u r correct. i was just asking to get more precise understanding of the query. 

Fixed asset A/c DR

To Bank/ Party

To TDS Payable

Full amount shud be capatlized

yes sudhanshu , you are right. but here we got two bills

Doesnt matter whether two bills or consolidated bill. 

Dear Shweta,

I missed you one point. If you have deducted excess TDS then it is not a problem what you can do is make the payment of excess TDS to the party and utilise the TDS deposited amount with another person as govt doesn't know against whose PAN no you have deducted TDS. So while preparing TDS return you can utilise the excess amount against other party.

Brother, She even need not repay back the amount. just she needs to give the party the TDS certificate -16A,, he will get the TDS credit..... Practicaly people do this only, unless the amount is too too big, that party is shouting on you.

I know it is possible but that should be the last option. It may be possible that other person have to claim refund if we deduct excess TDS and it is showing a negative image that we dont know the provisions of the Act properly.

Hmmm may be. i think Sweta's query is being solved, hmmm shewta.... even if its still unsolved.... do reply