Let say, Rent contract of Rs.50,000 PM ended on 31.5.14 and company had not deduct TDS on the same because of rent amount will not be exceed Rs. 1,80,000 i.e. limit for the current FY. Now company made a new contract with the same party for 2 more month of Rs.50,000 each month.
Now total payment for the FY is Rs. 2,00,000 and paid TDS on all 4 months.
My Q is that can company is lible to pay interest on late payment of deduct of TDS for April and May 2014?
no, not liable to pay interest..
you are liable to deduct tds only when aggregeate amount of rent paid exceeds of rs.180000.....in case, aggreageate amount of rent paid is rs. 180000 or below, you are not required to deduct tds.....
If the ITO becomes aware of this, they will make you pay the interest. To be on the safe side, you may pay the interest for late deduction of TDS.
In My View
You have to pay interest because obligation of deduction arises at the time of payment or credit whichever is earlier. However the 1,80,000 limit prescribed as a explanation to the main section, so if the limit is crossed your obligation for deduction will be from the date of credit.
Fytomax Nutrition Private Limited
Aurangabad
CA Inter
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