Tds deducted but not deposited

TDS 564 views 7 replies

Haresh

self employed

45 Points Joined February 2009

Please advice on following:

Company ABC deducted TDS @ 10% (Rs. 10,000/-) on Rs. 100,000/- and made payment of Rs. 90,000/- to Mrs. Y (Mrs. Y is wife of one of the director of ABC) towards professional fees rendered by Mrs. Y to ABC.

Here, ABC didn’t deposited TDS into government treasury and hence not issued TDS certificate to Mrs. Y. So, without waiting for TDS certificate, Mrs. Y filed her income tax return before due date showing income of Rs. 90,000/- in return.

Now, my query is whether ABC can write-off Rs. 10,000/- in books instead of paying into government treasury, since Mrs. Y has already filed her return of income. Kindly guide me.

Replies (7)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210177 Points Joined July 2016

If at all you do that , but what about TDS to be paid to Government over 90000-/?

Bharath

C.A C.S

3983 Points Joined October 2009

Hi,

Just because the company dosent deposit the deducted amount will not make Miss Y liable for payment and just because Miss Y has filed her IT return with Rs 90,000 will not help ABC company from penalty by IT department. It dosent depend upon relations in the case you have mentioned. The onus of deducting and depositing lies with the deductor.Any failure on this part will make him liable for penalty and action.

CA Harshal Totla

Chartered Accountant

2229 Points Joined May 2014

Write off?? Are you serious?? Don't even think about it. Mr.Bharath rightly said that onus of deducting and depositing tds lies with deductorand any failure will make you liable for consequential penal, interest and protection proceedings.
Moreover, the above payment will also be disallowed.

Kaushik Joshi

Practising Chartered Accountant

1527 Points Joined January 2009

Dear Haresh,
Mrs. Y should've shown Rs 1 lakh as income and not Rs 90000/-. Secondly if she has filed the return then the company can take a CA certificate to that effect.
Then expense is allowed to company and tds liability does not arise.

Kaushik Joshi

Practising Chartered Accountant

1527 Points Joined January 2009

Thirdly, you'll need to pay Rs 10000/- to Mrs. Y. You cannot write off the amount for the next three years.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210177 Points Joined July 2016

My dear collegues, this query has already been resolved by the experts of querist.

Let us take it as the difference between the theory and the practical aspect, here.

The tax consultant of Mrs. Y had solved the problem before filling her return.

The auditor of M/s, ABC co., before sighing the report (currently active) and filling the return of the company has verified the solution with respect to the liability over the company.

Mr. Kausik Joshi has rightly expressed his practical experience.

We can look out more such aspects as quitz.

Haresh

self employed

45 Points Joined February 2009

Thanks everyone for your valuable comments and showing active interest in my query....!!!

I will have to check what figure Mrs. Y has considered as income in her return, which Mr. Kaushik Joshi has advised, but this will take some time. Anyways, I think my query has been dealt with appropriately and no further query exists now. After considering the facts, I feel I will be in a position to tackle this issue. Thanks once again for coming to my rescue.