Tds on provion for expenses

Dear All!

Please clarify whether there stands TDS liability on the part of the company in the following case.

The company has created provion on Professional charges for the month of April. This provision was not created with reference to a single vendor. Is the company liable to pay TDS on such provision created?

Thanks in advance!

Replies (5)

yes, on provision of exp.  TDS liability is applicable

you must deduct TDS and deposit

TDS IS DEDUCTIBLE AT THE TIME OF CREDITING OR PAYMENT WHICH EVER IS EARLIER , HERE AS U CREDITED U HAVE TO DEDUCT TDS

Dear Aishwarya,

Without prejudice to the above opinions, I would like to draw you attention to the following case law :

M/s. Pfizer Ltd vs. Income Tax Officer(TDS)

 

ITA No. 1667/Mum/2010 (date- 31-10-12)

Ø  Referring to the decision given by the  Mumbai Tribunal in the case of  IDBI vs. I.T.O 107 ITD 45(Mum), the ITAT in the given case held that, since the payee is not identifiable at the time of making provision, TDS need not be deducted on the amount of Provision. Further, since  the entire provision is written back in the next year and actual amount paid/credited was subject to TDS, the assessee has complied with TDS provisions.

 

Yes, as per provisions of TDS, tax uis required to be deducted at the time of provision for expenses or making payment whichever is earlier. So in your case TDS will be applicable & the same should be deposited to govt with 1.5% interest per month

Originaly postrd by ca adesh gupta

"Yes, as per provisions of TDS, tax uis required to be deducted at the time of provision for expenses or making payment whichever is earlier. So in your case TDS will be applicable & the same should be deposited to govt with 1.5% interest per month"

I aggree with him
 

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