22 September 2012

Note on Immunity from TDS Default

(NOTIFICATION NO. 37/2012 [F.NO. 142/18/2012-SO(TPL)], DATED 12-09-2012)

·         Any person who fails to deduct the whole or any part of tax deducted at source on the sum paid or credited to the account of resident shall not be deemed to be an assessee in default if the following conditions are satisfied:

o   If payee has furnished his return of income under section 139
o   If Payee has taken into account such sum for computing income in such return of income
o   If Payee has paid the tax due on the income  declared by him in such return of income, and
o   the person furnishes a Certificate in Form 26 A or Form 27BA as the case may be to this effect from a practicing Chartered Accountant

·         However, the Deductor is required to pay interest u/s 201(1A) of the Income-tax Act.
·         Disqualifications of CA to certify Form 26A or Form 27BA
o   If CA is a director, partner or employee of the payee entity or its associated concerns.
o   If certificate proved incorrect or false is liable for penal action.

·         As per  Section 40(a)(ia) no disallowance if the above provisions are complied in full as per Section 201.

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