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Treatment of amount Capitalised on which TDS Deducted

Ved Prakash Sahoo (Article Assistant) (32 Points)

04 January 2011

Dear all,

Please suggest me towards the treatment of amout on which TDS has been deducted but not deposited in o the govt account. and the same has been capitalised while preparing Financial Statement.

Whether the same will be required to be disallowed or not, as the provision says abount disallowance of the amount on which TDS has been deducted but not deposited.

Please suggest me in this regards.

Thank you.

Ved Prakash Sahoo

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2 Replies

Shweta Bansal (CA) (175 Points)
Replied 04 January 2011

Hi,

The amount of TDS once deducted has to deposited with the government, else it shall be disallowed.

As far as capitalisation is considered the deduction of TDS shall not affect it. You can deposit the TDS ASAP and the deduction shall be allowed in the same A/Y.

Hope this helped.

Naresh Reddy (CA,Final) (123 Points)
Replied 04 January 2011

Hi...... I too with sweetha, but one thing that, If the TDS was deducted it shall be deposited with in 7 days from the close of that month, if not deposited Interest should be paid on the default amount @ 13% permonth and part of month. But in the capitalization concerned there is no disallowance to the company.