If we book salary on the last day of same month then we will have to pay TDS on salaries in the next month. But if we book salary on 5th of next month then TDS on salaries will be payable in next to next month. By booking salary on nth day of next month we can delay the payment of TDS to the credit of Govt. by one month. I wanted to know that whether this type of practice will be allowed or not? If not then please give reference of relevant circular/section of IT Act,1961.
Also will the company be liable to pay interest on late payment of TDS?
Thanks in advance.
In case of salary the TDS is payable within 7 days of end of the month in which the tax is deducted. And tax will be deducted at the time of credit or payment of the same. Salary is required to be accrued for every month even you pay the same is next month. That means in any case you will have to pay the tax by 7th of next month.
Section 192 deals with the same.
Regards
Hitesh
Guest
Posted on 04 January 2009
Sec 192 provides to deduct tax on salary only on payment......Yes there are some loophole in provisoins but we can't do any thing...........taxation runs on provisions and not on logic
According to Section 192 TDS on salary can be deducted at the time of payment of salary and not on accrual basis........and the reason being in Income Tax calculation under the head of salary also salary received is considered as income and not accrued......and according to me salary cycle doesnt metter so much as every deductor has to deposite tax ......maybe a bit late......and in practical ......i think lots of companies are giving salaries on 1 st of the month these days.....so i am not agree it has loopholes
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