Please Help: tds deduction
Posted Date : 14-Jul-2011 , 10:25:51 am | Posted By: Ashish Sanghi
Category :
Income Tax | Answers :
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Comments :
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If company pays advance professional fees and in the same month book invoices and deduct tds at the time of booking invoices. whether interest @1% would be applicable |
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Answers:
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 Answer by: CA ANKUR KAPIL |
| No if we book tds in the same month
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| Answer by: CA. Sachin Data |
| Going by the provisions of Sectioin 194J of the IT Act, the TDS should be deducted at the time of payment or credit, whichever is earlier. But in the aforementioned case, the TDS has been deducted at a later stage which is defeating the provision of the law. Further, the TDS deducted must be deposited in the following month. But here, as both the transactions are taking place in the same month....the liability to deposit the tax amount only arises in the following month.
So as per my opinion, the Revenue is not getting any harm and therefore interest @1% should not be levied.
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| Answer by: CA VIKAS JAIN |
| interest will be payable for late deposit of tds liablity. however the tds deduction entry should be made in books on the day when you make advance payment of professional fees.
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