Respected sir,
I have query on application if TDS provisions in case of Compensation paid on Breach of Contract.
we came acoss a case where the assessee had a contract with a party to Deliver TDR Rights within specified time, but assessee failed to deliver the same. as per agreement they paid certain amount as a compensation, same charged to Profit & loss account. Whether the same transaction would attract TDS?
No need to deduct tax at source on compensation....!!!
Dear Amar,
The 1st thing you need to verify whether the assessee is in business of trading in TDR, if the same is true then assessee can be able to claim deduction of said expenditure or else its a capital expenditure for him.
TDS would not be applicable on such payments as compensation for breach would not be covered under any nature of payments where TDS is applicable.
Regards
Kunal
what is the full form of TDR?
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