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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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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No TDS to be deducted on Export Commission by Hero Motors to HMCL

Commissioner Of Income Tax- IV Vs Hero Motocorp Limited (Delhi High Court) - In CIT Vs. Hero Motor corp Ltd, the Delhi High Court held that the payment of export commission made by the Hero Motors to Honda Motor Co. Ltd (HMCL) was not in the nature of payment of royalty or fee for technical services attracting dis allowance under Section 40 (a) (i) of the Income Tax Act....

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TDS U/s. 194C not deductible on wages paid to labourers working under direct supervision of assessee

Tapas Paul Vs ACIT (ITAT Kolkata) - Now the issue before us arises so as to whether the labourers are the employees of assessee or they are working in contractual capacity attracting the provisions of TDS. ...

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

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....

Read More

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...

Read More

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....

Read More

“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
Posted Under: Income Tax |

No TDS to be deducted on Export Commission by Hero Motors to HMCL

Commissioner Of Income Tax- IV Vs Hero Motocorp Limited (Delhi High Court)

In CIT Vs. Hero Motor corp Ltd, the Delhi High Court held that the payment of export commission made by the Hero Motors to Honda Motor Co. Ltd (HMCL) was not in the nature of payment of royalty or fee for technical services attracting dis allowance under Section 40 (a) (i) of the Income Tax Act....

Read More

TDS U/s. 194C not deductible on wages paid to labourers working under direct supervision of assessee

Tapas Paul Vs ACIT (ITAT Kolkata)

Now the issue before us arises so as to whether the labourers are the employees of assessee or they are working in contractual capacity attracting the provisions of TDS. ...

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Hon’ble Supreme Court puts an end to Section 40a(ia) Controversy

M/s Palam Gas Service Vs CIT (Supreme Court of India)

One of the classic controversies, lasting for more than a decade, is disallowance for non-deduction/payment of TDS on domestic payments u/s 40a(ia)....

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Section 40(a)(ia) paid vs payable controversy settled by SC

M/s Palam Gas Service Vs Commissioner of Income Tax (Supreme Court of India)

Section 40(a)(ia) covers not only those cases where the amount is payable but also when it is paid. In this behalf, one has to keep in mind the purpose with which Section 40 was enacted and that has already been noted above. ...

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Sec 40(a)(ia) amendment extending TDS payment due date U/s. 139(1) is Retrospective

The Commissioner of Income Tax­ Vs Shraddha & S S Kale, Joint Venture (Bombay High Court)

Amendment to Section 40 (a)(ia) of the Act by Finance Act, 2010 is retrospective with effect from 1st April, 2005 as held by various High Courts....

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TDS defaults when amount is Payable to a Resident

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...

Read More
Posted Under: Income Tax |
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