When to TDS deducted?
If we make payment to party/person, but we are not sure that payment will exceed the limit (eg. Payment for Prof.fees- limit Rs.30000/- p.a.), then what is procedure to follow.
1. Deduct the TDS at time of Invoice/Advance?
Or
2. Wait for invoice exceed the limit (until not deduct TDS), when exceed limit , then TDS deduct on entire bill(s) of Financial year of party?
Kindly suggest.
Thanks..
Santosh Thakur
| Originally posted by : Santosh V. Thakur | ||
 |
When to TDS deducted? If we make payment to party/person, but we are not sure that payment will exceed the limit (eg. Payment for Prof.fees- limit Rs.30000/- p.a.), then what is procedure to follow. 1. Deduct the TDS at time of Invoice/Advance? Or 2. Wait for invoice exceed the limit (until not deduct TDS), when exceed limit , then TDS deduct on entire bill(s) of Financial year of party? Kindly suggest. Thanks.. Santosh Thakur |
 |
Your second option is correct.
If you are not sure that it will exceed the limit, better deduct TDS,,, ask the person for his PAN no.,, (If he do not have PAN, then charge Tds @ 20%),,
and after availing PAN "fill his PAN no and file revised TDS return",,, in this way the party will get that TDS amount......
@ Anandan,,, AS per rules of TDS,, you should deduct TDS at the time of payment,, even if don't exceed the limit.....
@ Anshul, i agree with u, but not only when payment, payment or invoice booking whichever is earlier to TDS should deduct.
@ Santosh,,, yea ,, correct sorry.........
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :-
AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER)
FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 .
YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS.
BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY.
REGARDS:-
CA PRAVEEN
| Originally posted by : CA PRAVEEN SINGH | ||
|
|
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
|
| Originally posted by : CA PRAVEEN SINGH | ||
|
|
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
|
| Originally posted by : CA PRAVEEN SINGH | ||
|
|
BASIC PRINCIPLE OF DEDUCTION OF TDS IS :- AMOUNT PAID TO PARTY OR PARTY A/C IS CREDITED (WHICH IS FALL EARLIER) FOR LIMIT AS FOR ONE BILL EXCEEDING Rs 30000.00 or ANNUALLY Rs 75000 . YOU HAVE TO ESTIMATE EARLIER.BY APPLYING BEST EFFORTS.WHETHER LIMIT CAN CROSS. BUT AS PER MY VIEWS.TDS SHOULD BE DEDUCTED IN EACH BILL FOLLOWING SAFE SIDE TO AVOID INTEREST & PENALTY. REGARDS:- CA PRAVEEN |
|
Agree
Dear Sir,
If we Pay more than 30000/- Annually we need to Deduct TDS.... Its nt 75000/-,
Dear Santhosh,
Practically what I am doing is your 2nd option !
Can anyone of you please provide any case law related to manufacturer making payment to dealers as incentive without deducting TDS?
when make payment to dealer as incentive, it's called commission/Brokerage paid.
You should deduct TDS @ 10% (threshold limit Rs.5,000/- per year)
If we are Paying Professional or Consultancy Charges the Threshold Limit is 30000/- p.a., and Rate of TDS is 10%
CAclubindia
