section 40(a)(ia)

Consequences for TDS non compliances

Income Tax - 1. Disallowance of expenditure; u/s 40(a)(i) of and section 40(a)(ia), if Tax not deducted / not deposited till the due date of filing of return; a. Payment to Non-resident ;100% expenses disallowed b. Payment to resident ;30% expenses disallowed However, if tax is deducted or deposited in subsequent year, the expenditure so disallowed s...

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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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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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Referral fees to foreign concern for introducing clients is not a fee for technical services

M/s Knight Frank (India) (P) Ltd. Vs ACIT (ITAT Mumbai) - Services rendered by foreign concern for introducing a client did not make-available any technical knowledge, experience, skill, know-how or processes to assessee, therefore, related payment did not fall within the realm of "Fees for included services" as envisaged in Article 12 of the Indo-US, DTAA...

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Salary cannot be disallowed for mere non furnishing copies of appointment order, attendance register

Manne Hareesh Vs ITO (ITAT Hyderabad) - Manne Hareesh Vs ITO (ITAT Hyderabad) During the course of scrutiny assessment proceedings, it was observed by the Ld. AO that the assessee has debited in his P & L Account an amount of Rs. 2,40,000 towards Accounting Charges. On query, it was explained by the assessee that the outstanding amoun...

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No Section 40(a)(ia) for Non TDS deduction if Payee paid tax to government

Sai Pushpa Sharada Alliance Vs ITO (ITAT Pune) - Second proviso to section 40(a)(ia) is retrospective in nature and in such circumstances, if payee has paid tax to government account then payer cannot be held liable for non-deduction of TDS....

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Disallowance U/s. 40(a)(ia) cannot be made for non-compliance with requirements of Section 194C(7)

CIT Vs M/s. Sri Parameswari Spinning Mills Private Limited (Madras High Court) - Whether the Tribunal is correct in not confirming the disallowance under Section 40(a)(ia) made by the Assessing Officer when the assessee did not comply with requirements of Sub-Section 7 of Section 194C read with Rule 31A?....

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TDS not dedutible on charges paid to Banks for providing payment gateway

PCIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court) - Services provided by the payment gateway is such that the charges collected by it has to be necessarily treated as fees and not as a commission. The payment in fact is made by one principal to another and it is only being facilitated by the payment gateway by providing a service....

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

Referral fees to foreign concern for introducing clients is not a fee for technical services

M/s Knight Frank (India) (P) Ltd. Vs ACIT (ITAT Mumbai)

Services rendered by foreign concern for introducing a client did not make-available any technical knowledge, experience, skill, know-how or processes to assessee, therefore, related payment did not fall within the realm of "Fees for included services" as envisaged in Article 12 of the Indo-US, DTAA and payment made to foreign concern con...

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Salary cannot be disallowed for mere non furnishing copies of appointment order, attendance register

Manne Hareesh Vs ITO (ITAT Hyderabad)

Manne Hareesh Vs ITO (ITAT Hyderabad) During the course of scrutiny assessment proceedings, it was observed by the Ld. AO that the assessee has debited in his P & L Account an amount of Rs. 2,40,000 towards Accounting Charges. On query, it was explained by the assessee that the outstanding amount of Rs. 2,40,000 was […]...

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No Section 40(a)(ia) for Non TDS deduction if Payee paid tax to government

Sai Pushpa Sharada Alliance Vs ITO (ITAT Pune)

Second proviso to section 40(a)(ia) is retrospective in nature and in such circumstances, if payee has paid tax to government account then payer cannot be held liable for non-deduction of TDS....

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Disallowance U/s. 40(a)(ia) cannot be made for non-compliance with requirements of Section 194C(7)

CIT Vs M/s. Sri Parameswari Spinning Mills Private Limited (Madras High Court)

Whether the Tribunal is correct in not confirming the disallowance under Section 40(a)(ia) made by the Assessing Officer when the assessee did not comply with requirements of Sub-Section 7 of Section 194C read with Rule 31A?....

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Consequences for TDS non compliances

1. Disallowance of expenditure; u/s 40(a)(i) of and section 40(a)(ia), if Tax not deducted / not deposited till the due date of filing of return; a. Payment to Non-resident ;100% expenses disallowed b. Payment to resident ;30% expenses disallowed However, if tax is deducted or deposited in subsequent year, the expenditure so disallowed s...

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TDS not dedutible on charges paid to Banks for providing payment gateway

PCIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court)

Services provided by the payment gateway is such that the charges collected by it has to be necessarily treated as fees and not as a commission. The payment in fact is made by one principal to another and it is only being facilitated by the payment gateway by providing a service....

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Retrospective amendment cannot change tax withholding liability, with retrospective effect

DCIT Vs Amol Dicalite Ltd. (ITAT Ahmedabad)

Retrospective amendment in law does change tax liability in respect of an income, with retrospective effect, but it cannot change tax withholding liability, with retrospective effect....

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No TDS on commission payment made to overseas agents

Pr. CIT Vs Komal Amin Exports Pvt Ltd (Gujarat High Court)

When the commission paid to the non-resident agents was neither received or deemed to be received in India nor accrued or was deemed to accrue in India, no income was chargeable to tax under the provisions of the Act. When the payment made by assessee to the overseas agent for services rendered abroad was not income chargeable to tax in I...

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Lorry Booking Agent not liable to deduct TDS on freight charges

Sunil Kumar Vs ITO (ITAT Delhi)

Assessee had incurred only office expenditure and no expenditure relating to transportation of goods such as loading, unloading charge etc., has been debited, we are of the considered opinion that the assessee actually engaged himself not in the transportation business, but only facilitating or arranging transportation for various parties...

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Payment for bandwidth charge utilization was royalty & TDS applicable

CIT Vs Infosys Technologies Ltd. (Karnataka High Court)

CIT Vs Infosys Technologies Ltd. (Karnataka High Court) Payment for bandwidth charge utilization was royalty and TDS was required to be deducted under section 195 of Income Tax Act, 1961 and on failure to deduct TDS, the disallowance under section 40(a)(i) was rightly made by the Assessing Officer. FULL TEXT OF THE HIGH COURT ORDER [&hell...

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