Will debit for TDS be deemed advance?

 I have two queries on TDS matters:

1. If TDS liability was there in first quarter but was not deducted, can we deduct in second quarter and file return only for second quarter? Can this way penalty for non-submission of TDS return be avoided?
 
2. If no tax was deducted and entire invoice amount paid to the party, assessee debits party for the TDS amount and pays TDS. Now, will this debit to the party be treated as advance or not. If yes, then do we have to deduct tax even on this advance?
Thanks.
Replies (2)

2.  Cannot understand your question.  Could you please explain it in detail, so that I can provide the solution.

Dear Faiz Sir,

For Case 1. Since liability had arisen in 1st qtr,penalty cannot be avoided even if tax is deducted and paid in 2nd qtr.If the liability would have arisen in 2nd qtr instead of 1st qtr,the payment would have been shown as related to 2nd qtr and penalty would have been avoided.

For Case 2.The amount paid excess can be treated as advance and  be adjusted while making payment to the party in 2nd qtr.Tax has to be deducted on the gross amount of the invoice raised by the party in the 2nd qtr. Payment can be made after adjusting the amount of TDS and the advance.In this way tax is also deducted and paid on the excess amount paid earlier .

Vithal.

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