TDS not paid till one year

Mr.Gaurant

If any assessee fails to deduct tax at source or fails to deposit the deducted tax to the credit of central government  before the due date for filing his return of income the expenses on which tax is to be duducted at source such as (i) interest (ii) commission or bromerage, (iii) rent, (iv) royalty (v) fees for professional services or fees for technical servies payable to a resident or (vi) amounts payable to a contranctor or sub-contractor , the impugned expenses will not be allowed as expenses i.e. the assessee cannot deduct the said expenses from his income to arrive net profit as per the provisions of section 40(ia) of Income-tax Act, 1961.

As per provisons of section 201(1A) of Income-tax Act, the assessee who fails to deduct tax at source or fails to deposit the deducted tax to the credit of central government he is liable to pay

                          (a) interest on one percent for every month or part of amonth on the amount of such tax from the        date     on which such tax was deductible to the darte on which such tax is deducted;

                        (b) at one and one-half per cent for every month or prt of amonth n the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

   An assessee who fails to deliver or cause to be delivered within the time specified sub-section Z(1) of section 206A is liable to pay by way of penalty at the rate of Rs.100/- per every day during the which the failure continues.

Best Wishes

Sathikonda

Thanks for the reply.

Hence for Non deduction of TDS: 12% p.a. Interest

            for Non Payment of TDS: 18% p.a. Interest

            for non filing of return:Rs 100 per day penalty

The expenses is allowed only when TDS on it is paid.

I hope I understood correctly.

Thanks once again.