Tds on salary

Hello Friends,

 

I just wanted to know that whether salary expense is diallowed while computing income from business & profession if company has not paid tds deducted on it before filing of income tax return. (Mention relevant sections or case law).

Regards,

CA Sunil Rawat

Replies (5)

Salary is not disallowed for non deduction of TDS

As per section 40(a)(ia) all the expenses u/s 30-38 will be disallowed if

  1. tds has not been deducted
  2. tds has been deducted but has not been paid during previous year or in subsequent year in time as prescribed in section 200.

on

  • Interest,
  • commission,
  • brokerage,
  • rent,
  • royalty,
  • fees for technical/professional services payable to a resident ,
  • amounts payable (for carrying out any work contract)

to a resident contractor/sub-contractor

provided that

  1. if tax has been deducted and paid in subsequent year or
  2. deducted in previous year but paid in subsequent year after expiry of the time limit u/s 200

then expenditure will be allowed in the year of payment of tds.

as per section 40(a)(ia) all the expenses u/s 30-38 will be disallowed if

  1. tds has not been deducted
  2. tds has been deducted but has not been paid during previous year or in subsequent year in time as prescribed in section 200.

on

  • Interest,
  • commission,
  • brokerage,
  • rent,
  • royalty,
  • fees for technical/professional services payable to a resident ,
  • amounts payable (for carrying out any work contract)

to a resident contractor/sub-contractor

provided that

  1. if tax has been deducted and paid in subsequent year or
  2. deducted in previous year but paid in subsequent year after expiry of the time limit u/s 200

then expenditure will be allowed in the year of payment of tds.

u/s 40(a) salary will be disallowed as expenses
If a Company don't deduct/pay TDS on salary 
 

Thanks Manish just wanted to confirm..

As per sec. 40 salary is disallowed in case of where salary paid without deduct TDS

(A) outside India; or

(B) to a non-resident,

other then this salary is allowed

In my opinion, the same should not be disallowed if suc hsalary is paid to Resident individual, since section 40--(related to amounts not deductible) doesn't cover the disallowance of salary in case of                non-payment/deduction of TDS.

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