section 40(a)(ia)

TDS deduction under wrong section – No disallowance of expenses – Section 40(a)(ia)

Income Tax - As per the provision of Section 40(a)(ia) of the Income Tax Act, 1961, any amount payable  to any Indian resident person tax is to be deducted under chapter XVII-B. If tax has not been deducted or after deducting tax, has not been deposited before submission of return of Income u/s 139(9) of the Act, 30% […]...

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Liability to deduct section 194R TDS on Benefit or Perquisite in Business or Profession

Income Tax - Any person being Individual/HUF/Company/Firm/LLP etc. providing any benefit or perquisite whether convertible into money or not, is liable w.e.f. 1-7-2022 to deduct TDS U/s 194R @ 10% on the value or aggregate value of such benefit or perquisite....

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Disallowance u/s 40(a)(ia), 40A & 43B vis a vis income declared u/s 44AD & 44ADA & 44E

Income Tax - The issue under consideration in this write up is whether disallowance u/s 40(a)(ia), 40A & 43B of Income Tax Act, 1961 are attracted in case of an eligible assessee declaring income under presumptive taxation scheme contained in section 44AD, 44ADA & 44AE. Section 44AD, 44ADA & 44AE starts with a non-obstante clause reading a...

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Section 28(va) and Section 40(a)(ia) of Income Tax Act, 1961- Q&A

Income Tax - INCOME TAX QUESTIONS & ANSWERS SERIES PART -IV – Sub: Section 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961; Today we are going to consider two problems based on provisions of Sections 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961 respectively. PROBLEM :- A Ltd., transfers a building worth of Rs. […]...

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Disallowance for Non deduction of Tax at Source

Income Tax - Analysis of Section 40(a)(i)- Non-compliance of Provisions of TDS where payment is made to Non Resident If any interest, royalty, fees for technical services or other sum chargeable under this Act, which is payable,— (A) Outside India; or (B) In India to a non-resident, not being a company or to a foreign company, On which […]...

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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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Payment to train resources to provide pre & post sale services is FTS

Sunsmart Technologies Pvt. Ltd Vs ACIT (ITAT Chennai) - Sunsmart Technologies Pvt. Ltd Vs ACIT (ITAT Chennai) As per Explanation-2 to Sec.9(1)(vii) of the Act, FTS means any consideration (including in lump sum consideration) for the rendering of any managerial, technical or consultancy services, but does not include consideration for any construction, a...

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Section 194A TDS not deductible on Factoring Charges

DCIT Vs 3i Infotech Consultancy Services Limited (ITAT Mumbai) - DCIT Vs 3i Infotech Consultancy Services Limited (ITAT Mumbai) ITAT held that factoring charges incurred by the assessee company is not in the nature of interest and that the assessee was not under the obligation to deduct TDS as per the provisions of section 40(a)(ia) of the I.T. Act. For this, we ...

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TDS not deductible on interest on savings bank account and compulsory deposit account

Ram Garhia Co-operative Bank Ltd Vs ACIT (ITAT Delhi) - ITAT Delhi held that there is no liability to deduct TDS on interest on savings bank account and interest of compulsory deposit account as per the provisions contained u/s 194A of the Act. Accordingly, disallowance u/s 40(a)(ia) unsustainable....

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Disallowance of freight & carriage expense justified for non-submission of TDS payment Proof or CA certificate

Paras Nath Singh Vs ACIT (ITAT Patna) - Paras Nath Singh Vs ACIT (ITAT Patna) Main grievance of the assessee is disallowance u/s 40(a)(ia) amounting to Rs. 25,74,023/- being the expenditure incurred in respect of freight and carriage. On this specific issue from the perusal of assessment order passed by the AO and it was come to our notic...

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Section 194C(6) & (7) cannot be read together to attract section 40(a)(ia) disallowance

Shri Gopinathan Vs The ITO (ITAT Chennai) - Shri Gopinathan Vs ITO (ITAT Chennai) It is not the case of the Department that the Assessing Officer has omitted to consider the claim of expenses and thereby passed the rectification order under section 154 of the Act. In this case assessment was reopened under section 147 of the Act and during th...

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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 ...

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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)"

Payment to train resources to provide pre & post sale services is FTS

Sunsmart Technologies Pvt. Ltd Vs ACIT (ITAT Chennai)

Sunsmart Technologies Pvt. Ltd Vs ACIT (ITAT Chennai) As per Explanation-2 to Sec.9(1)(vii) of the Act, FTS means any consideration (including in lump sum consideration) for the rendering of any managerial, technical or consultancy services, but does not include consideration for any construction, assembling, mining or like project undert...

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Section 194A TDS not deductible on Factoring Charges

DCIT Vs 3i Infotech Consultancy Services Limited (ITAT Mumbai)

DCIT Vs 3i Infotech Consultancy Services Limited (ITAT Mumbai) ITAT held that factoring charges incurred by the assessee company is not in the nature of interest and that the assessee was not under the obligation to deduct TDS as per the provisions of section 40(a)(ia) of the I.T. Act. For this, we would like to […]...

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TDS not deductible on interest on savings bank account and compulsory deposit account

Ram Garhia Co-operative Bank Ltd Vs ACIT (ITAT Delhi)

ITAT Delhi held that there is no liability to deduct TDS on interest on savings bank account and interest of compulsory deposit account as per the provisions contained u/s 194A of the Act. Accordingly, disallowance u/s 40(a)(ia) unsustainable....

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Disallowance of freight & carriage expense justified for non-submission of TDS payment Proof or CA certificate

Paras Nath Singh Vs ACIT (ITAT Patna)

Paras Nath Singh Vs ACIT (ITAT Patna) Main grievance of the assessee is disallowance u/s 40(a)(ia) amounting to Rs. 25,74,023/- being the expenditure incurred in respect of freight and carriage. On this specific issue from the perusal of assessment order passed by the AO and it was come to our notice that he had categorically […]...

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TDS deduction under wrong section – No disallowance of expenses – Section 40(a)(ia)

As per the provision of Section 40(a)(ia) of the Income Tax Act, 1961, any amount payable  to any Indian resident person tax is to be deducted under chapter XVII-B. If tax has not been deducted or after deducting tax, has not been deposited before submission of return of Income u/s 139(9) of the Act, 30% […]...

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Section 194C(6) & (7) cannot be read together to attract section 40(a)(ia) disallowance

Shri Gopinathan Vs The ITO (ITAT Chennai)

Shri Gopinathan Vs ITO (ITAT Chennai) It is not the case of the Department that the Assessing Officer has omitted to consider the claim of expenses and thereby passed the rectification order under section 154 of the Act. In this case assessment was reopened under section 147 of the Act and during the course of […]...

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No disallowance u/s 40(a)(ia) if recipient offered payment made by assessee as income – ITAT remands matter back to AO

ACIT Vs Manish Raichand Shah (ITAT Ahmedabad)

Disallowance u/s 40(a)(ia) cannot be made if recipient has offered payment made by assessee as income in their hands. The Assessing Officer is directed to verify above facts and if it is found that payee has already offered above amount as income in their return of income, disallowance u/s.40(a)(ia) made by Assessing Officer would not sur...

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Disallowance u/s 40(a)(ia) unsustainable as TDS not deductible on bank commission

DCIT Vs Sareen Sports Industries (ITAT Delhi)

ITAT Delhi held that TDS provisions are not applicable in case of commission paid to bank and commission paid to partners. Accordingly, disallowance u/s 40(a)(ia) unsustainable....

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Disallowance u/s 40(a)(i)/ 40(a)(ia) unsustainable as amount not claimed as revenue expenditure

PCIT Vs Linde India Limited (Calcutta High Court)

Held that disallowance by invoking provisions of section 40(a)(i)/ 40(a)(ia) unsustainable as the alleged amount is not debited to the profit and loss account and accordingly not claimed as deduction under profits and gains of business or profession...

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TDS not deductible on interest paid by Co-op. Bank to Nominal members

Mandheshwari Urban Development Co-op. Bank Ltd. Vs ACIT (ITAT Pune)

Mandheshwari Urban Development Co-op. Bank Ltd. Vs ACIT (ITAT Pune) issue in the present appeal relates to whether a nominal member, who is not a registered member of the society, can be treated as a member of the cooperative society whether the exemption is available under clause (v) of sub-section (3) of section 194A of […]...

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