TDS & Section 40(a)(ia) (Income Tax)

TDS 1300 views 5 replies

SSA JI

Ca Final

1970 Points Posted on 27 May 2011

Sir/Madam,

My Client not deducted the tds and made the whole PAYMENT during the previous year , also after making the payment it paid the required amount of tds to the Govt out of pocket and stands that paid amount of tds to the party's ledger from whose account the tds is not deducted .After some time party made that
payment .

Q: Whether Section 40(a)(ia) get attracted or not ?

Q: If the expenses got disallowed , in which year it is allowed ?

Note : the whole above transaction were happened in the same previous year (2010-11)

Replies (5)

prateek

G.M.

21 Points Posted on 27 May 2011

tds shall be allowed as expense for the a.y. 2010-2011,

however the delay in payment shall be liable to interest @ 1%p.m. or part thereof.

CA. ANKUR JAIN

CA.....

2800 Points Posted on 27 May 2011

Originally posted by : prateek
	tds shall be allowed as expense for the a.y. 2010-2011, however the delay in payment shall be liable to interest @ 1%p.m. or part thereof.

agreed

CA ADITYA SHARMA

CA IN PRACTICE

16719 Points Posted on 28 May 2011

Originally posted by : prateek
	tds shall be allowed as expense for the a.y. 2010-2011, however the delay in payment shall be liable to interest @ 1%p.m. or part thereof.

agree

SSA JI

Ca Final

1970 Points Posted on 29 May 2011

i suggest all of u read section 40(a)(ia) properly and then answer the querry and mr prateek tds is an income tax which shall never be allowed as expenditure in whole income tax act

CA NITUL MEHTA

KPMG-Senior Consultant-International Tax

236 Points Posted on 10 June 2011

payments made shall be allowed as expenditure in PY 2010 2011 ony and there will be no dis allowance interest will however be paid at 1.5% and not 1% as the period between entries of TDS made and tds atually padi to govt account, but for the perioed of date of transsction and entires of TDS 1% interest will be have to be paid , and expense will always be alloed grossed up only nd TDS deducted will not be disallowed becoz it is income tax for the purpose of the recciver but for your client that is payer it is just an obligation that is created by law.