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Tds on salary and proffessional fee

sharon s (Accounting Associate) (66 Points)

18 February 2015

Hi Dear Members,

Currently iam working with a Private Ltd Company incorporated under companies Act 1956.My Doubts is.

We hired some professional services from an another firm those engaged in IT field.Actually the are our sundry creditors for long time .Right now they send a bunch of invoices generated in 2014 Aug,sept,.....etc months.

All are above one lakh Rupees .But we are going to make payment now.so My doubt is under sec194J TDS is to be deducted at which time.

Please clarify the point of taxation with the above example.

Thanks

Regards

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7 Replies

Raphael (Chartered Accountant) (214 Points)
Replied 18 February 2015

Dear Friend,

TDS has to be deducted at the time of credit or payment whichever is earlier. Hence, in your case as you have not accounted the bills earlier, the TDS will have to be deducted at the time of accounting such bills in your books now.

sharon s (Accounting Associate) (66 Points)
Replied 18 February 2015

But all the invoice are dated as the month they due... Or generated..

Rajinder Verma (Officer Account) (34 Points)
Replied 19 February 2015

No issue you just booked as per your received date and decduct TDS as per rule

sharon s (Accounting Associate) (66 Points)
Replied 19 February 2015

so you people telling that invoice date is not important .

Rajinder Verma (Officer Account) (34 Points)
Replied 19 February 2015

In case date of invoice say 30 June 2014 and you receive the bill on date 31 Jan 2015, you pass the entry on 31 Jan 2015 and the date of dedcution should be 31 Jan 2015.

Decduction should be on the basis of date of payment or credit whichever is earlier.

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 19 February 2015

Hi Sharon, make the entry for TDS on which date you are credit the party accounts. It is not matter that bill date is old. Show these all bill on date when you have received and make the provision for TDS as per TDS law i.e. on credit or payment whichever is earlier.

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 23 February 2015

Hello,

Date of payment or credit, whichever is earlier will be taken as relevant date for TDS.

So payment or booking of bill will be the dates for TDS.

You may receive a bill & you follow a policy of booking it only when it is approved by the authorized person. So booking date possible after the bill date.

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