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Whether TDS applicable on advance

VARUN (CA) (24 Points)

10 April 2009

Whether any sum paid as advance to contractor is liable for TDS deduction. In case the contractor has not started work whether TDS is deductible on advance to contractor. What are the Income tax rules/judgement in this regard.

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10 Replies

madhur gupta (student/article ) (1022 Points)
Replied 10 April 2009

as per rule t.d.s is liable to be deducted at the time for payment or at the time of credit whichever is earlier

so as per this t.d.s should be deducted on advance payment.......

(Guest)

Yes, Advance payment is liable for deducting TDS. As per IT "Payment or Credit which ever is earlier" as per this rule if payment made without credit it called advance.

Jitender (Chartered Accountant) (8724 Points)
Replied 10 April 2009

tds is applicable on advances

CA Mayank jain (CA) (27 Points)
Replied 11 April 2009

As per the provision of Income Tax Act, Payer shall deduct tax, at the time of credit in books or payment, whichever is earlier. therefore TDS is applicable on advance.

CA.Kavisha.ICAI (Chartered Accountant) (54 Points)
Replied 11 April 2009

Tds is deducted at the time of payment or at the time of credit whichever is earlier.

Arros (RM) (69 Points)
Replied 11 April 2009

Yes TDS is the deduction from the total amount either its As advence or on or after delieveries.

thnx

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work is worship (Service) (2728 Points)
Replied 11 April 2009

Yes TDS is to be deducted at the time of payment whether it be advance. part or final payment, since as per rules TDS is deducted at thetime of payment or credit whichever is earlier.