Tds required on capital expenditure?

Sir

I have to pay money to the third party. That expenditure will be capitlised later. Is tds is to be done for the payemnt to be done to third party or we can ignore ?that amount can be treated as per our books is product development exp.

Replies (10)

Dear Mr. Srinivas

Please refer As 28.  You will get clarification.  As per AS 28 product development expenditure has tobe wiritten of f in the year in which it is incurred.  In surch circumstances the question of capitalisation does not arise.

Sathikonda

Dear Mr. Srinivas

Please refer As 28.  You will get clarification.  As per AS 28 product development expenditure has tobe wiritten of f in the year in which it is incurred.  In surch circumstances the question of capitalisation does not arise.

Sathikonda

TDS provisions does not discreminate between revenue & capital expenditure. If on any payment any of the TDS provisions apply than TDS needs to be deducted irrespective of the nature of expenditure.

Originally posted by :CA. Rashi Goyal
" TDS provisions does not discreminate between revenue & capital expenditure. If on any payment any of the TDS provisions apply than TDS needs to be deducted irrespective of the nature of expenditure. "


 

provided amount paid exceeds the limit mentioned under different sections

Dear Shrinivas,

U need to deduct the TDS and pay it off within the due date. Else the principal amt will be disallowed in future. There is no question of expenditure being capital or revenue.

U need to understand under which section the tds is applicable , chek the upper cap and deduct the TDS. If WCT is applicable then chek the tds rate under MVAT.

Please chek whether product development expenses is covered under professional services. u can take the help of vendor for understanding the section under whihhc tds is to be deducted.

Non deduction of tds will alos impact , if ur trying to get lower deduction certificate of tds (from debtors).

 

 

Rgds./Nitesh

 

 

C.A. Rashi Goyal is correct.

Thank you Mr. Goyal for updating me.

Best Wishes

Sathikonda

Tax is not to be deducted in case of capital expenditures.

Hello, Mr. Nitin, Your straight answere is wrong. The TDS provisions are applicable in case of revenue as well as capital expenditure.

Hello Mr. Nitin, you are wrong.  There is no mention of revenue of capital expenditure in TDS provisions.  If the amount paid exceeds the exemption limit tax needs to be deducted at the rates specified under different sections. 

Mr. Srinivas has not mentioned nature of payment and amount hence it is difficut to say which provision and section apllies to his transaction

I don't want to state anything on your comment.

I am giving the answer which is substantiated by law, not by opinions.

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