TMI Blog194-C- Interest LiabilityX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear All, Please guide me on the following issue: A company has received a bill of Rs. 18000 for vehicle running expense during April. The Company did not deduct TDS as limit of 30,000 as well as 70000 was not applicable at that time. Now on January end the contractor has raised a bill of Rs. 48000 and the company expects that the transaction with the contractor would exceed 70000 and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it deducted TDS on the current as well as the previous amount. Please guide me with reference to case laws (if any) whether interest on delay deduction of TDS applicable on earlier sum, i.e. 1% per month. Regards CA.Suman Sharma - Reply By Rajendran Natesan - The Reply = Hi, As per this IT Law, the Yearly Limit u/s 194C be paid/credited to Contactor or Sub-contractor exceeds R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.75,000 during the financial :Also where the aggregate of the amounts paid/credited or likely to year, TDS has to be made u/s 194C . As per this amenment there is no TDS need to deducted from their service... hanks N. Rajednran 9841302690 - Reply By Manish Phulwani - The Reply = Hi, As per Sec 194C , tax is to be deducted when : a)Single payment or credit -Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount exceeds Rs.30000 b)Aggregate of all payments/credits in a financial year exceeds Rs . 75000 on any contract amouting to "Work". Since in your case,initially bill was raised for Rs.18000,it was not required to deduct the tax at tht time,but later another bill of Rs. 48000,now this bill amount exceeds Rs. 30000 as mentioned above,tax is to be made on the whole now. Further,you are requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to deduct tax even though the aggregate of the likely payments in a year are not expected to exceed Rs.7500 since the payment/credit for a single bill has exceeded Rs. 30000 as mentioned at point (a) above. I hope this resolves your query. Regards, Manoj Phulwani - Reply By Vivek Harsh - The Reply = In your case Interest shall be charged from the date when such TDS was liablle to be deuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted ( i.e at the time of credit of expenditure in books or payment whichever is earlier) till TDS is actually deducted @1% per month (SEC 201(1A)) COMMISSIONER OF INCOME TAX (TDS) Versus M/S AMERICAN EXPRESS BANK LTD 2011 - TMI - 208119 - DELHI HIGH COURT I think its difficult to escape from the applicability of Sec 201(A) . - Reply By Manish Phulwani - The Reply = @ Vivek Hars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, I think the company was not liable to deduct tax initially when bill of Rs. 18000 was raised,bt later as the bill of Rs. 48000 was raised,the company deducted on the whole.So,no default by company since company was not liable to deduct initially,hence,Interest on delayed deduction as contemplated u/s 201(1A) is not attracted. - Reply By Vivek Harsh - The Reply = @ Manish It has been clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly mentioned in the query that the l transaction with contractor would excced 70,000, therefore tds is to be deducted on the total amount. on faliure to do so Interest is chargeable under 201(A) Proviso to 194C where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds 18 [seventy-five thousand rupees], the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson responsible for paying such sums referred to in sub-section (1) shall be liable to deduct income-tax under this section. - 194-C- Interest Liability - Query Started By: - Suman Sharma Dated:- 20-2-2012 Income Tax - Got 5 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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