sagar (CA Final) 06 July 2009
Is TDS applicable if purchased a Fixed asset? According to me. as per provisions if you do not deduct TDS. The expenditure will be disallowed.
For purchasing a fixed asset we do not debit an expenses account. Hence No TDS to be deducted.
In Otherwords if you are Capitalising an expenses Then TDS is to be deducted.
I am confused whether its true or not
RAJU (LEARNER) 07 July 2009
Tax is not deductible for purchase of any asset. However, if labour charges are paid for construction of building etc., TDS has to be deducted even if it is capitalised.
If I am not wrong, you are assuming a situation wherein payments on which tax is deductible is capitalised. In such an event, there is no question of additing back the expense, since expenditure is not claimed. However, this does not exempt you from deducting tax. You will always be liable to pay TDS irrespective of whether expenditure is claimed or not.