section 40(a)(ia)

“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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TDS defaults when amount is Payable to a Resident

Income Tax - In my earlier article I have made a discussion about the disallowance when the amount is payable to a non-resident /foreign company but TDS is not deducted by the payer . Section 40(a)(ia) deals with the situation when the amount is payable to a resident . Hereon also we will discuss the complete scenario in parts to have a better underst...

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TDS default on Payment of any Nature other Then Salary, to A Non-Resident / Foreign Company

Income Tax - In this article, I am going to have a discussion on Section 40(a)(i) of the Income Tax Act, 1961. Which deals with disallowance of certain business expenditure in case of TDS default is made by the Payer at the time of making payments to a non-resident or foreign company. ...

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Section 40(a)(ia) proposed to apply to Income from Other Sources

Income Tax - Provisions of section 40(a)(ia) shall, so far as they may be, apply in computing income chargeable under the head income from other sources as they apply in computing income chargeable under the head Profit and gains of business or Profession....

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Need to Rationalize Provisions of Section 40(a)(ia) of Income Tax, 1961

Income Tax - CA Sharad Jain Introduction: The section 40(a)(ia) of the Income Tax Act (“Act”) was brought on the statute by the Finance (No. 2) Act, 2004, with effect from 1-4-2005 i.e., from Assessment Year 2005-06 with the aim to ensure better compliances of TDS provisions. Since inception, these provisions are being felt by the tax assesses [&h...

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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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TDS U/s. 194H not applies on discounts on principal to principal basis

ITO Vs Tarun Sales (ITAT Delhi) - ITO Vs Tarun Sales (ITAT Delhi) Since no dealer or sub-dealer was appointed either by BSNL or by the assessee, for the purpose of marketing the products and/or service of the Bharat Sanchar Nigam Ltd., the entire sales were to customers, either directly or through shopkeepers, who rendered services ...

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TDS on IUC charges paid to foreign / non-resident telecom operators and discount to prepaid distributors

Bharat Sanchar Nigam Ltd. Vs Addl. CIT (ITAT Delhi): ITA No. 920/Del./2017 - Addition on account of discount extended to prepaid distributors Third proviso to section 194H will get attracted only when the nature of payment is “commission or brokerage”. Parties before us agree that majorly the distribution of products by BSNL and MTNL takes place through Public Call Offic...

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TDS not deductible on Reimbursement of expenses billed separately

ITO Vs Deepak Bhargawa (ITAT Delhi) - In this case the appellant is receiving the material on Freight Prepaid basis (C&F). The foreign shipping companies were charging only the incidental charges like Port charges, Container payment, Stationery charges, License fees, Stamp charges, Bank charges, De-stuffing charges etc....

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No disallowance u/s 40(a)(ia) for TDS deduction under Wrong Provision under a bonafide belief

M/s. Dish TV India Ltd. Vs ACIT (ITAT Mumbai) - Out of these four appeals two appeals are filed by the assessee while the other two appeals are filed by the Revenue for against the orders of the CIT(A) – 4, Mumbai dated 13.02.2017 and 06.02.2017 for assessment years 2011-12 and 2012-13 respectively....

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Discount not claimed in commutation of income cannot be disallowed U/s. 40(a)(ia)

Goutam Das Judge Vs. ITO (ITAT Kolkata) - Where the impugned amount is not claimed by the assessee by way of deduction under sections 30 to 38 of the Act while computing the income of the assessee under the head Profits and gains of business or profession the question of making any dis allowance under section 40(a)(ia) of the Act will not a...

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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)"

TDS U/s. 194H not applies on discounts on principal to principal basis

ITO Vs Tarun Sales (ITAT Delhi)

ITO Vs Tarun Sales (ITAT Delhi) Since no dealer or sub-dealer was appointed either by BSNL or by the assessee, for the purpose of marketing the products and/or service of the Bharat Sanchar Nigam Ltd., the entire sales were to customers, either directly or through shopkeepers, who rendered services to the customers. ...

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TDS on IUC charges paid to foreign / non-resident telecom operators and discount to prepaid distributors

Bharat Sanchar Nigam Ltd. Vs Addl. CIT (ITAT Delhi): ITA No. 920/Del./2017

Addition on account of discount extended to prepaid distributors Third proviso to section 194H will get attracted only when the nature of payment is “commission or brokerage”. Parties before us agree that majorly the distribution of products by BSNL and MTNL takes place through Public Call Office franchisees since this was an infrastr...

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TDS not deductible on Reimbursement of expenses billed separately

ITO Vs Deepak Bhargawa (ITAT Delhi)

In this case the appellant is receiving the material on Freight Prepaid basis (C&F). The foreign shipping companies were charging only the incidental charges like Port charges, Container payment, Stationery charges, License fees, Stamp charges, Bank charges, De-stuffing charges etc....

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No disallowance u/s 40(a)(ia) for TDS deduction under Wrong Provision under a bonafide belief

M/s. Dish TV India Ltd. Vs ACIT (ITAT Mumbai)

Out of these four appeals two appeals are filed by the assessee while the other two appeals are filed by the Revenue for against the orders of the CIT(A) – 4, Mumbai dated 13.02.2017 and 06.02.2017 for assessment years 2011-12 and 2012-13 respectively....

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Discount not claimed in commutation of income cannot be disallowed U/s. 40(a)(ia)

Goutam Das Judge Vs. ITO (ITAT Kolkata)

Where the impugned amount is not claimed by the assessee by way of deduction under sections 30 to 38 of the Act while computing the income of the assessee under the head Profits and gains of business or profession the question of making any dis allowance under section 40(a)(ia) of the Act will not arise...

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Profit increased due to disallowance U/s. 40(a)(ia) is eligible for deduction U/s. 10A

Dy. CIT Vs. Goldman Sachs Services (P) Ltd. (ITAT Bangalore)

It cannot be denied that expenditure incurred by the assessee for the purpose of developing housing project and not allowable by virtue of section 40(a)(ia) would ultimately go to increase assessee's profit from such business and profit as computed after making the dis allowance would, therefore, qualify for deduction under section 10A....

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Reimbursement of Actual Expenditure does not attract Section 194C & 40(a)(ia)

ACIT (TDS) Vs St. Mary's Rubbers Private Limited (ITAT Cochin)

Ld. AR submitted that the Delhi Bench of the Tribunal in the case of ITO vs. Deepak Bhargawa in I.T.A. No.343/Del/2012 dated 13.11.2014 had clearly held that section 194C would not be applicable for reimbursement of expenditure....

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No TDS required to to be deducted on Reimbursement of expenses against separate bills to C&F agents

ACIT (TDS) Vs St. Mary's Rubbers Private Limited (ITAT Cochin)

Reimbursement of expenses against separate bills to C&F agents doesn't require TDS and hence no dis allowance u/s 40(a)(1a)... ITAT Cochin bench held in the case of St. Mary's Rubbers dismissing revenue's appeal...

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No disallowance for interest paid to NBFC without TDS deduction, considered by NBFC in their Income

Shri Azmath Ulla Vs ACIT (ITAT Bangalore)

Having held that the second proviso to section 40(a)(ia) shall have retrospective effect the question arises that if the recipients of interest in question have already considered the same for computing their income offered to tax then the dis allowance u/s. 40(a)(ia) is not attracted....

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

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....

Read More
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