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Tds deduction on contract

vinayak c. chavan (CPT passed) (1011 Points)

07 February 2014

We are private limited company in Mumbai. We have given renovation contract. on 27th Jan 2014 we deductd TDS of Rs.200 but gave cheque on 02nd february 2014 to contractor of Rs.19800 (20000-200).We paid TDS of rs.200 on 27th Jan. Will there will any problem arises as we have deducted TDS before making payment? How could I show it while filling TDS return?

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ashish (CA) (79 Points)
Replied 07 February 2014

TDS has to be deducted on booking or payment, whichever is earlier.
So, you have correctly dedcuetd the TDS.
There will not be any problems in showing it in the return as you can show it as a deduction for the month of January. The fact that the actual payment was made in Feb is irrelevant.

Also, I hope you have considered the ST as per reverse charge.
The liability to pay ST on works contract is on the service receiver.