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TDS is applicable on Fixed Assets?


sagar (CA Final)     06 July 2009

sagar
CA Final 
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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

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RITESH KOTHARI (B.COM, FCA, DISA(ICAI))     06 July 2009

RITESH KOTHARI
B.COM FCA DISA(ICAI) 
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 it is absolutely correct.

on purchase of fixed asset thre is no TDS liability

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sagar (CA Final)     06 July 2009

sagar
CA Final 
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Thanks for confirming. Shall I take it as final answer

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RITESH KOTHARI (B.COM, FCA, DISA(ICAI))     06 July 2009

RITESH KOTHARI
B.COM FCA DISA(ICAI) 
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 YES U CAN.

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sagar (CA Final)     06 July 2009

sagar
CA Final 
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Thank you sir

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CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB)     06 July 2009

CA Devanshi Gandhi (Ajani)
FCA DISA Mcom CIFRS & LLB 
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 not applicable

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Aditya Maheshwari (CA in Practice)     06 July 2009

Aditya Maheshwari
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If labour charges on addition of furniture are seperately billed then TDS should be deducted for safety sake and to avoid any unnecesary litigation

Sagar (Student)     07 July 2009

Sagar
Student 
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Yes there is no liability of Tax Deducted on source on purchase of fixed assets.. When you pay Labour charges against fixed assets then you have to deduct TDS on that only if the limit is crossed.

Amit (student)     07 July 2009

Amit
student 
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yes no there is no TDS liability on purchase of fixed assets.

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RAJU (LEARNER)     07 July 2009

RAJU
LEARNER 
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Hi sagar,

 

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.

 

 


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