section 40(a)(ia)

Amounts not deductible U/s. 40(a) of income Tax Act, 1961

Income Tax - Under the Income tax Act, 1961 Profit or gain from Business or profession is considered income and such income is chargeable to tax. The expenses incurred in relation to business can be deducted from the revenue from Business or profession. However, there is certain restriction on such deduction of expenses....

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Non-Compliance of TDS Provision where Payment is made to a Resident

Income Tax - Section 40(a)(ia) of Income Tax Act, 1961 deals with non compliance of provision of TDS where payment is made to a Resident. 30% cent of any sum payable to a resident on account of interest, commission or brokerage, Rent, Royalty, fees for professional services or, fees fir technical services payable to a resident, or amounts payable to a...

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Disallowance on account of Non-deduction of TDS – Section 40(a)(ia)

Income Tax - The provisions of Section 40(a)(ia) of the Act were brought on Statute by Finance Act 2004, w.e.f. 01.04.2005, i.e the same is applicable for assessment year 2005-06 and subsequent assessment years....

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Consequences for Non Payment or Late Payment of TDS

Income Tax - In Recent past we noticed that department has taken late payment of TDS very seriously and in addition to imposing Interest and Penalty for Late Payment, they also start initiating Criminal Prosecution against those responsible for Deduction and Payment of TDS....

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“Paid” vs “Payable” interpretation- Section 40(a)(i) & Section 40(a)(ia) clarified by Apex Court

Income Tax - There have been substantial debate around the point whether the term ‘payable’ used in section 40(a)(ia) would include amounts outstanding at the end of the year or both amounts outstanding as well as paid during the year....

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Section 40(a)(ia): Disallowance of expenditure for non-deduction of tax at source on payment made to resident

Income Tax - Section 40(a)(ia) is amended via Finance (No. 2) Act, 2014 to restrict the amount of disallowance for non-deduction of tax to 30% of expenditure. The proviso is also amended to the effect that 30% of such sum shall be allowed as a deduction in computing the income of the previous year in which tax has been paid....

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Change in provisions related to disallowance of expenditure on account of non-compliance with TDS provisions : Budget 2010-11

Income Tax - The existing provisions of section 40(a)(ia) of Income-tax Act provide for the disallowance of expenditure like interest, commission, brokerage, professional fees, etc. if tax on such expenditure was not deducted, or after deduction was not paid during the previous year....

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No TDS on Payment to Amazon for Web-Hosting as same is not Royalty

EPRSS Prepaid Recharge Services India Pvt. Ltd. Vs ITO (ITAT Pune) - EPRSS Prepaid Recharge Services India Pvt. Ltd. Vs ITO (ITAT Pune) Tribunal further observed that there was no amendment in the DTAA between the two countries analogous to the Explanation 5 to section 9(1) of the Act and accordingly Amazon was not chargeable to tax in respect of Web hosting charges ...

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Amendment to Section 40(a)(ia) has Retrospective Effect

Perfect Circle India Pvt Ltd Vs Pr. Commissioner of Income Tax (Bombay High Court) - Perfect Circle India Pvt Ltd Vs Pr. CIT (Bombay High Court) The Revenue would content that the benefit of this proviso would be available to the assessee only prospectively w.e.f. 1.4.2013. Various Courts, however, have seen this proviso as beneficial to the assessee and curative in nature. The lead...

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TDS deductible on delayed pay-in-charges payable to sharebroker for making delayed payment

M/s. Shree Ganeshaya Trading Pvt. Ltd. Vs ITO (ITAT Mumbai) - M/s. Shree Ganeshaya Trading Pvt. Ltd. Vs ITO (ITAT Mumbai) Delayed pay-in-charges payable by the assessee to sharebroker for making delayed payment of purchase consideration for purchase of shares is infact „interest‟ within meaning of Section 2(28A) of the 1961 Act and the assessee was require...

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Expense can’t be disallowed for Wrong Statement given by truck owner

Shri Anil Khandelwal Vs ITO (ITAT Indor) - Shri Anil Khandelwal Vs ITO (ITAT Indor) Once the condition of further proviso of Section 194C(3) of the Act are satisfied, the liability of the payee to deduct tax at source would cease. Examining the facts of the instant appeal we find that the assessee received Form 15I from the truck owner name...

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No TDS on export commission to non-residents for services rendered outside India

ACIT Vs Goodrick Group Ltd. (ITAT Kolkata) - Where payment of commission on exports to non-resident was not taxable in India due to services rendered outside India, the same was not subject to TDS under section 195....

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Disallowance for failure to withhold tax- Sec.195 rw Sec. 40(a)(i)

Circular No. 3/2015-Income Tax - (12/02/2015) - Circular No. 3/2015 Section 40(a)(i) of the Act stipulates that in computing the income chargeable under the head "Profits or gains of business or profession", any interest, royalty, fees for technical services or other sum chargeable under this Act either payable in India to a non-resident (not bei...

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S. 195 AOs to tax taxable part of sum paid to NR for TDS default

Instruction No. 02/2014 - (26/02/2014) - Sub: Deduction of tax at source under Section 195 read with Sections 201 of the Income-tax Act, 1961 relating to payment made to a non-resident-reg. Section 195 of the Income-tax Act (hereafter referred to as 'the Act') provides that any person, responsible for paying to a non-resident not being a ...

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CBDT circular on Section 40(a)(ia)-TDS Disallowance

Circular No. 10/DV/2013-Income Tax - (16/12/2013) - Circular No. 10/DV/2013-Income Tax It has been brought to the notice of the Board that there are conflicting interpretations by judicial authorities regarding the applicability of the provisions of section 40(a)(ia) of the Income-tax Act,...

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section 40(a)(ia)’s Popular Posts

Recent Posts in "section 40(a)(ia)"

No TDS on Payment to Amazon for Web-Hosting as same is not Royalty

EPRSS Prepaid Recharge Services India Pvt. Ltd. Vs ITO (ITAT Pune)

EPRSS Prepaid Recharge Services India Pvt. Ltd. Vs ITO (ITAT Pune) Tribunal further observed that there was no amendment in the DTAA between the two countries analogous to the Explanation 5 to section 9(1) of the Act and accordingly Amazon was not chargeable to tax in respect of Web hosting charges received from the assessee […]...

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Amendment to Section 40(a)(ia) has Retrospective Effect

Perfect Circle India Pvt Ltd Vs Pr. Commissioner of Income Tax (Bombay High Court)

Perfect Circle India Pvt Ltd Vs Pr. CIT (Bombay High Court) The Revenue would content that the benefit of this proviso would be available to the assessee only prospectively w.e.f. 1.4.2013. Various Courts, however, have seen this proviso as beneficial to the assessee and curative in nature. The leading judgment on this point was of [&hell...

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TDS deductible on delayed pay-in-charges payable to sharebroker for making delayed payment

M/s. Shree Ganeshaya Trading Pvt. Ltd. Vs ITO (ITAT Mumbai)

M/s. Shree Ganeshaya Trading Pvt. Ltd. Vs ITO (ITAT Mumbai) Delayed pay-in-charges payable by the assessee to sharebroker for making delayed payment of purchase consideration for purchase of shares is infact „interest‟ within meaning of Section 2(28A) of the 1961 Act and the assessee was required to deduct income-tax at source on such...

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Expense can’t be disallowed for Wrong Statement given by truck owner

Shri Anil Khandelwal Vs ITO (ITAT Indor)

Shri Anil Khandelwal Vs ITO (ITAT Indor) Once the condition of further proviso of Section 194C(3) of the Act are satisfied, the liability of the payee to deduct tax at source would cease. Examining the facts of the instant appeal we find that the assessee received Form 15I from the truck owner namely Shri Kishorilal Birla […]...

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No TDS on export commission to non-residents for services rendered outside India

ACIT Vs Goodrick Group Ltd. (ITAT Kolkata)

Where payment of commission on exports to non-resident was not taxable in India due to services rendered outside India, the same was not subject to TDS under section 195....

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ITAT on Disallowance of Payments of interest to NBFC without TDS deduction

Shekhar Dadarkar Vs DCIT (ITAT Mumbai)

TDS provisions were applicable to interest payments made to NBFCs, however, if payees had shown interest income in their respective returns and paid income tax thereon, no disallowance could be made in view of second proviso to section 40(a)(ia)....

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Disallowance U/s. 40(a)(ia) not justified for Freight charges paid but not claimed as expense

CIT Vs Shree Choudhary Transport (Rajasthan High Court)

Where assessee was earning booking charges for facilitating transport of goods and was merely a conduit in passing the freight to the truck owners, who were actually plying trucks, disallowance under section 40(a)(ia) was not justified because freight payment was not even claimed by assessee as an expense in its profit and loss account....

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Section 40(a)(ia) applies only when there is no TDS deduction

Scrabble Entertainment Ltd Vs ACIT (ITAT Mumbai)

Once there was compliance to TDS provisions, even if there was short deduction of TDS or TDS had been deducted under different sections, there was no scope for AO to disallow expenditure under section 40(a)(ia) as provisions under section 40(a)(ia) is applicable only when there is no TDS deduction....

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No disallowance U/s. 40(a)(ia) where net profit was estimated

Power Liners Vs. ACIT (ITAT Jaipur)

Once the income of the assessee was estimated after rejection of books of account, then, the AO could not make disallowance on the same books of account for the purpose of disallowance by invoking provisions of section 40(a)(ia) or general disallowance under section 37(1). Hence, the disallowance made by the AO was deleted....

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No disallowance U/s. 40(a)(ia) for shortfall in TDS Payment due to difference of opinion

M/s. Power Max (India) Pvt. Ltd. Vs DCIT (ITAT Kolkatta)

Where there was any shortfall due to difference of opinion or taxability of any items or the nature of payment falling under various TDS provisions, assessee could be declared to be assessee-in-default under section 201, but no disallowance could be made under section 40(a)(ia) and therefore, disallowance made was to be deleted....

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