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Tds disallowance - urgent

26 March 2012

One of our client has deducted TDS from several payments during FY 2010-11. A part of TDS deducted is paid on or before 31st March 2011. Balance is paid on or before the date of filing the return(say September 30, 2011). the TDS paid after March 31, 2011 relates to not only provisions made on 31st March, 2011, but also some deductions made during the Financial Year.

Please clarify whether tds deducted during the financial year 2010-11 and paid on or before filing the income tax return i.e. (before 30th Sep 2011) is allowable for tax computation.

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9 Replies

Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 26 March 2012

Mr.Sharique Tasheen

Please go through the section 40 of Incom-tax Act, 1961. I am hereunder reproducing the relevant portion.

Section 40.

Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession"-

(ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-constractor, being resident, for carrying out any work on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or after deduction has not been paid on or before the due date specified in sub-sectin (1) of section 139.

Now you can decide yourself whether the impugned expenses are admissible or not.

Best Wishes

Sathikonda

Mukesh Trivedi (Asst manager) (28 Points)
Replied 27 March 2012

No, will not be allowed.

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 27 March 2012

In simple word,

Expenses will be allowed if tds deduted and deposited before the due date of ROI in case of Resident and

in case of NR,expenses will be allowed only when you deducted the TDS and make the payment before the due date of deposited of tds i.e 30 april.

Thanks & Regards

Karandeep

Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 27 March 2012

Mr.Mukesh Trivedi and Karandeep

We are not answering the questions of a layman, we are answering questions of professionals. Hence while answering the questions of professioanl we must make them think and get the answer, themselves.

Hope both of you have understood the spirit of professionalism.

Best Wishes

Sathikonda

Mukesh Trivedi (Asst manager) (28 Points)
Replied 27 March 2012

Sathikonda i appreciat ur reply and reccomandation. i like ur presentation related to query.. for better undestanding of the subject matter selfanalysis is realy help. still on one point m not agree here since the person asked qus. need urgent answer..it will also helpful if answer can be concluded. karandeep had concluded well. with best wishes mukesh

(Guest)

I be to differ with the spirit advocated by sathikonda and his supporters.

This forum should help ( or in fact I believe it is to ) those who know the legal provisions but could not decide the applicability to a specific situation.

The professionals are expected to help in applying the applicability of those provisons to a given situation.

When the ? is specific by reproducing the provisons what is the 'think' (ing) you are trying to develop .

He has posted his problem because he is thinking.......... will think.

This sort of answers will further confuse those who are already in a state of confusion.

Phalgun (Audit Manager) (327 Points)
Replied 27 March 2012

Hi friend,

Your TDS deducted & paid on or before due date of filing returns is allowed . As stated in the law below :

(ia) any interest, commission or brokerage, rent, royalty,] fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, [has not been paid on or before the due date specified in sub-section (1) of section 139 :]

²¹ [Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.]

Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 28 March 2012

Dear Professionals

I have gone through the profile of Mr.Sharique Tasheen before presenting my answer in writing.

I agree with the views of our colleagues here to some extent. Anyhow I am of the opinion that our answers must be precise, contain analysis and supporting material wherever the situation demands.

You all might have observed here many people are posting their questions as if we were sitting together and discussing the matter. They are not framing the questions to get the exact answer. They should provide the background facts of the question. Even if it is an imaginary question, they should explain the imaginary situation.

The answers given by members and the experts are also lack of quality.

I have brought these facts to the management of this site through email. The management has not yet responded to my mail.

Best Wishes

Sathikonda