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TDS on car allowance payable qtrly.

TDS 1206 views 1 replies

JOSEPH

Head - Payroll and Compliance

28 Points Posted on 26 July 2009

Hello,

In my office we have a car allowance and that is payable quarterly to the Managers for example one manager gets 2 lacks this is payable 50000 per qtr.

My query is how to treat this at the time of monthly TDS? Since this amount is not payable monthly can I deduct TDS only when it is paid or is it mandatory to deduct TDS equal each month even the amount is paid quarterly.

If I deduct TDS every month this particular Manager take home salary will be reduce by Rs. 5000 as we are deducting TDS 30 % on the car allowance, which is payable quarterly.

Kindly provide if possible the provisions where we can deduct the TDS only while making the payment, as this will help the Manager.

Regards

Joseph

Replies (1)

sandeep sahu

93 Points Posted on 27 July 2009

Dear Joseph

While most of the sections dealing with TDS stipulate that tax to be deducted at the time of credit or payment whichever is earlier,Sec 192 indicates "at the time of payment". Therefore in my view the liability to deduct Tax in case of Salaries arises only at the time of payment. So in your case you can deduct qtrly at the time of paying the car allowance.

Thanks

Sandeep Sahu