Tds on statutory audit fees

TDS 3734 views 2 replies

 

TDS ON STATUTORY AUDIT FEES:

Generally Audit Fees is decided by the Board of Directors in consultation with the

Auditors at the time of finalization of accounts, which mostly are done in August.

Provision for the same is made in the previous year for which TDS is required to

be paid in May and Return is required to be filed in June. Generally it is very

difficult on or before end of May to finalize amount of Audit Fees and sometime

even name of Auditors. There may be some instances where amount of Audit

fees differs or Auditors may change like:

 

a) Statutory Auditors were appointed as Tax Auditors after end of May.

b) Other Chartered Accountant is appointed as Tax Auditors instead of Statutory

auditors in earlier year.

c) Auditors resigned or otherwise termination of assignment and another Auditor

is appointed.

d) Merger/ Demerger of Audit Firms take place.

 

In these types of cases it is difficult to pay the TDS on Audit Fees on or before

end of May, file TDS Return and issue TDS Certificate before end of June. TDS

certificate is required to be handed over to the deductee within 7th June i.e. TDS

Certificate is to be handed over before completion of assignment and payment.

 

In these circumstances what should be the date for deduction and payment of

TDS?

IS it 31st March and 31st May or within 7th day of following month in which

accounts are finalized?

 

 

Replies (2)

Date of Payment or Credit in books, whichever is earlier, will be taken as relevant date for TDS.

In my opinion, the only option left for you is to file TDS return without making provision for audit expenses. Assuming that your auditor will be finalised in after TDS return for Jan- Mar, while finalising books of acccounts with them, u will have both the Audit Fee amount and the name of the auditors. At that time make provision as on 31st March for the exact fees, deduct and pay TDS along with interest. and revise TDS return to include details of audit fees.


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