IS IT REASONABLE TO DEDUCT TDS ON ADVANCE PAYMENT TO ANYONE. IN MY OPINION THERE ARE NO. OF SITUATION ARISED WHEN ADVANCE PAYMENT TO BE REFUNDED. WHENEVER THE ADVANCE PAYMENT TURN OFF AS EXPENSES OF ADVANCE GIVER THEN TDS HAS TO BE DONE. ULTIMATELY IN NEW SCHEME THE GOVT. SAYS EXPENSES YOU CLAIMED IN THAT PARTICULAR YEAR IN WHICH TDS HAS DEPOSITED. THEN WHY NOT TDS ON ADVANCE PAYMENT WHEN ADVANCE PAYMENT TURN OFF AS EXPENSES.
THINK ABOUT THIS EVERY ONE
THANKS
yes , TDS will be deductable on Advance pament under respective Section fo rpamet.
TDS to be deducted at the time of payment or credit whichever is earlier. When the TDS is made on advance payments that can be adjusted while booking the bill against that advance payment whether in the same financial or in the next financial year.
TDS needs to be deducted at applicable rates for respective assessees on advance payments. If advance payment is returned at a later stage, there is going to be no issue as the other party is going to claim it. Give adequate info in your TDS certificate.
As Raghuraj said TDS has to be deducted at the time of payment or credit whichever is earlier. If you are doubtful whether you are going to avail services or not and going to refund such advances then don't pay TDS. wait until you finalise your terms and conditions and then pay together with interest any which way u r not going to claim as expenses in which year you have given advance. If you paid also then you can adjust the same for another payment also. it is not bound by department that payment should be for that expenses/advances. so you have time till completion of year. you can adjust anytime.
Think about this and Please confirm me friends if i am wrong.
Thanks
Advance to professionals will attract tds or not ?
Deducting TDS from advance payment should be left to the discretion of the person concerned, because in case TDS is deducted and contract is cancelled, the administrative work following the rectification is doubled.
As per the tds provision of income tax act,(Expanses Due or paid, whichever is earlier ) Assessee shall deduct TDS & deposited in time to avoid penalty and interest on late payment if assessee makes ANY ADVACE PAYMENT to any person whom TDS to be deducted.
In case amount paid is refunded, then than assessee charge, such tds amount paid to department, from the person whom payment was made. Because amount so deposited is credited into the A/c of the person whom ADVACE PAYMENT is made. He can view this credit in 26 AS.
Thanks
Prakash mehta (cma final.)
what if TDS not deducted on Advance payments ?
Plz reply to my query
I am a machine manufacturer, I recveived advance payment with purchase order from the party for Machinery Sale. if there is any TDS amount dedected by the party . pls clarify
Hi,
As per the general Rule of TDS, it is liable to be deducted at the time for payment or at the time of credit whichever is earlier.
Therefore, TDS should be deducted on advance payment,
Read more at: https://www.caclubindia.com/forum/whether-tds-applicable-on-advance-30585.asp
TDS is deducted at the time of payment or credit - whichever is earlier
If in advance payment of rent amt refunded by lessor to lease then aslo we need to TDS ? in which Sec ?
IS THERE ANY CASE LAW PROVIDING THAT AO CAN DEMAND INTEREST ON LATE DEDUCTION OF TDS WHERE ADVANCE PAYMENT WAS DONE ON 01-MAY-22 AND INVOICE BOOKED AND TDS DEDUCTED ON 20-MAY-22 AND TDS PAID ON 07-JUN-22.
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