Wrong deduction of TDS

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CA P KARTHIKA

Chartered Accountant

304 Points Posted on 07 May 2009

Hi to all,

Can any one tell what is the subsequent things to be done if Tds is deducted wrongly at a higher percent other than the earlier percent at which he was entitled for TDS deduction.... If Tds is not yet remitted we can pay the balance to them and change the journal entry and pay the correct Tds... If other wise for a person to whom 2.266% is deducted so far now 10.3% is deducted and Tds is remitted, in such case the excess amount deducted should be paid to the deductee.

But any rectification is there for Higher rate of deduction of Tds by mistake after Tds being remitted?

Replies (2)

shammi

student

42 Points Posted on 08 May 2009

hi karthika

if tds is deducted at a higher rate then there is not a problem at all because when previous year will end then the deductor will issue form no. 16A to deductee in which it is mention that how much tds is deducted by him n on the basis of this deductee will claim deduction from income tax liability. finally i mean it will compensate on the other way.

CA P KARTHIKA

Chartered Accountant

304 Points Posted on 08 May 2009

ya u r right Shammi but my doubt is some clients will claim immediate payment due to higher Tax deducted ... if not paid even it could affect customer relation isnt it???