A company has taken office on rent for fy 13-14. The total rent for the year exceeds the limit of 180000. The company has booked rent for 6 months, i.e. April 13 to Sept 13 on 30th September 13 and deducted TDS on the same date. Is it correct or the Company should have deducted TDS every month when the rent becomes due. The rent payments were after september.
As per Sec 194I TDS is required on payment or credit in books which ever is earlier. Now booking of expenses is required when any amount is due as per agreement. If rent is due every month then it has to be booked monthly. Accordingly TDS liability would be monhtly.
It appears from the query that rent is due on monthly basis. Then TDS deduction on payment is not correct.
u should follow the Accrual basis of accounting and credit the rent expenses every month and deduct tax accordingly.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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CAclubindia
