TDS deducted late- is it disallowed u/s.40a(ia)

TDS 1596 views 3 replies

AMEET KIMBAHUNE

Consultant

87 Points Joined November 2008

I refer to the captioned subject. According to clause 27(b) to Form 3CD, we are required to report whether the Assessee has complied with provisions of Chapter XVII-B. One of the sub clauses requires us to report whether TDS was deducted late.

In one of my clients' case there was a late deduction; Does this qualify for disallowance u/s.40a(ia)?;

since shorter deduction, late deposition and non-deduction being other sub clauses in the same category require us to disallow the expenses.

Please offer your valuable comments.

Replies (3)

BHAGYESH RAVANGE

C.A Job

1528 Points Joined November 2007

Tax is deductible but not deducted

No deduction in the current previous year

If tax is deducted in any subsequent year, the expenditure will be deducted in the year in which TDS will be deposited by the assessee with the Government.

Tax is deductible (and is so deducted) during the last month (i.e., in the month of March) of the previous year but it is not deposited on or before the due date of submission of return of income under section 139(1)

No deduction in the current previous year

If tax is deposited with the Government after the due date of submission of return of income, the expenditure will be deductible in that year in which tax will be deposited.

Tax is deductible (and is so deducted) during any month but other than the last month (i.e., any time before March 1) of the previous year but it is not deposited on or before March 31 of the previous year

No deduction in the current previous year

If tax is deposited with the Government after the end of the current previous year, the expenditure will be deductible in that year in which tax is deposited.

kapil kumar agrawal

Chartered Accountant

169 Points Joined August 2009

If TDs is deductible in month of march and deducted in march then tds can be deposited up to due date applicable as per 139(1).

In any other case it shall be deposited up to 31st march

if not paid with in specified date then exp shall be disallowed....

You can check this prov in your case...

Thanx

Muralidharan

Chartrered Accountants

115 Points Joined November 2007

In one of my client's case, there has been short deduction of tax u/s 194C and 194I of the Income-tax Act viz., only the rate of deduction has been wrongly calculated. However, the tax deducted has been remitted. The Assessing Officer disallowed the expenditure on the ground that there is a violation u/s 40(a)(ia). Can we take a stand in the appeal that there is a deduction of tax but only a short deduction on account of rate.

a) The section contemplates non deduction and non remittance only.

b) The Officer can only levy 201(1A) and no disallowance is called for.

Valuable comments are solicited