Search Results For: 194J


QUERY: Mr. Champaklal is a practising Advocate. His gross fees for the year ended 31st March, 2009 were Rs. 27,00,000/-. During the year ended 31st March, 2010 the following issues have arisen on which Mr. Champaklal seeks advice from you

(a) For academic interest, Mr. Champaklal wants to understand the meaning of ‘interest’ on which tax is required to be deducted at source u/s. 194A

(b) Mr. Champaklal has taken a loan of Rs. 2,00,000/- taken by him from his wife for investing in a new car which forms part of his block of fixed assets. The loan carries interest @ 10% p.a. The loan was taken on 1st February, 2008. No interest was paid in the F.Y. 2008-09. As per the term of the loan agreed upon between Mr. Champaklal and his wife, the loan is to be treated at par with a Cumulative Time Deposit and interest is to be actually paid over only on expiry of 3 years. Mr. Champaklal wants to know whether he should account for the interest in his books (he follows cash method of accounting) and if yes, whether tax is required to be deducted at source. Also, if he now accounts for interest for the period 1st February, 2008 to 31st March, 2009 then whether there is any likelihood of it being disallowed on the ground that it is a prior period expenses?

(c) Mr. Champaklal purchased three computers, a printer and office furniture from Departmental Store. For this purpose, he utilized a special card issued by the Store to him (as he was a regular customer in the store). The card entitled him to make payment in the same manner as a Credit Card. However Mr. Champaklal has chosen to take credit rather than pay the card dues. He has therefore not paid the dues. The Store has charged interest on the delay in payment. Now, Mr. Champaklal has decided to opt for Direct Debit facility offered by his bank for paying off the Departmental Store card payments. He wants to know how the TDS obligation on the interest paid to the Departmental Store is to be satisfied if the payment is made by direct debit to his bank account.


ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , , ,
GENRE:
CATCH WORDS: ,

S. 2(28A) defines – Interest.

“Interest” means interest payable in any manner in respect of any moneys borrowed or debt incurred (including deposit, claim or other similar right or obligation) and includes any service fee or

QUERY: Number of professionals including C.A., C.S., Architects, Interiors and Business man like brokers are maintaining books on cash basis (receipt basis) and claiming TDS in the year of receipt of income irrespective of the year to which it pertains. Before introduction of e-filing system, such claim of TDS was allowed in the year of receipt of income. This was settled practice. But after e-filing regime, where credit is given on the basis of 26AS, such professionals and brokers are not getting credit of such TDS due to mismatch of the year. On this account many rectification are also pending.

Kindly enlighten how to overcome this problem.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,

As clarified by CBDT and prudent accounting practices, you should account TDS in the fees only. Any difference between actual TDS claimed by you and from AS 26 may be informed to the Assessing Officer for corrective action for issuing refund/

QUERY: Pursuant to corporate governance norms of SEBI, listed companies are required to appoint Non-executive Independent Directors who may be industrialists or professionals like Advocates, CAs, etc. They are paid sitting fees for attending board meetings of the company. They are also paid a commission based on percentage of net profits of the company. Whether such payments are liable to TDS and if yes, under which section
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: ,

– Non-executive Independent Directors are providing managerial services. Hence, Explanation 2 to section 9(1)(vii) would be applicable, which reads as under:

“Fee for technical services” means any consideration (including any lump sum

QUERY: X is in employment of of A Ltd. drawing salary of Rs. 4,20,540/-. During the year, he contributes Rs. 30,000/- to PPF. He has disclosed the following additional information to the employer:-

Rs.

Professional income from Consultancy (Net) 50,000

TDS u/s. 194J on consulting income 20,000

Losses under the head House Property (1,40,000)

Loss under the head Short Term
Capital Gain (5,000)

Donation covered u/s. 80G 50,000

What will be the withholding tax liability and how will it be calculated by the employer?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,

– As per S. 192(2B), where an employee having any income chargeable under the head “Salaries” has in addition, any income chargeable under any other head of income for the financial year, he may send to his employer, a statement of particulars of such other income and the tax, if any, deducted thereon and also the loss, if any, under the head “Income from house property”

QUERY: Mr. X a practicing Advocate who is subject to Tax Audit u/s. 44AB for the year ending March 31, 2008 having the following transactions during the financial year 2009-10

1. Constructed a house for self occupation & he is making payment to contractor Rs. 10,00,000/-.

2. Making payment to Architect for designing his house Rs. 1,00,000/-.

3. Borrowed funds from friends Rs. 10,00,000/- on which he wants to pay the interest.

Examine the applicability of TDS.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,

1. Section 194(C) provides that no individual or HUF shall be liable to TDS on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purpose of such individual or any member of HUF.