Dear Experts,
I have two questions with regards to a single transaction. A contract was signed for 1 lac.
A token 50% advance was paid in the last tax year (January 2011). No TDS was deducted as no Invoice was raised for the advance. The transaction was through a cheque and no VAT or service tax was deducted either.
The remaining 100% was paid in the current tax year (April 2011). Again No TDS was deducted for the full Invoice raised but tax for the entire 100% was paid as it was included in the Invoice.
We have informed of the mistake and the party has agreed to refund the TDS. The question is should we have deducted 2 TDS (seperately for each of the payment made even though only one Invoice was raised?)
The second question is, if the party refuses to refund any TDS that ought to have been deducted in the last tax year (as it was our mistake) what remedy should we now take to ensure that we are not penalised by the IT department.
Help please ..
CAclubindia
