Any Amount Payable
To Residents
On which Tds was deductible
But TDS Not deducted
Or
TDS deducted but not deposited within due date of ITR (31 July/30 September)
In such a case,30% of the amount will be disallowed
(Earlier whole 100% was disallowed)
Examples of Such Expenses are Interest, Royalty, Fees for Technical Services etc
CBDT Circular 10/2013
Note:-Although the Section mentions that this Section is Applicable on “Any Amount payable”.as per CBDT Circular,it is “Any amount paid or payable”
Hence this section applicable to those cases also when amount has been actually paid to assesse and not only those when amount is payable.
Deduction Allowed in Next Year
When TDS actually deducted and deposited in next year (after ITR Due date)
Or
When TDS deducted in previous year but deposited in next year
Then
That 30% which was earlier disallowed will be allowed in that next year when actually deposited
QUESTIONS
Q 1
| Particulars | Amount |
| SALES | 6000000 |
| Less | |
| EXPENSES | 4000000 |
| PROFIT | 2000000 |
Suppose 1500000 expenses were paid in India to residents on which TDS was deductible but not deducted
View answer
| Computation of PGBP Income | |
| Profit as per P& L A/c | 2000000 |
| Add | |
| Expense Disallowed | |
| TDS Not deducted | 450000 |
| (1500000*30%) | |
| Expense Allowed | |
| PGBP INCOME | 2450000 |
Q 2
| Particulars | Year 1 | Year 2 |
| SALES | 6000000 | 7000000 |
| Less | ||
| EXPENSES | 4000000 | 4500000 |
| PROFIT | 2000000 | 2500000 |
| Suppose expenses include following payment to Residents | ||
| Expenses on which TDS deducted but deposited late on 21 July | 20000 | 25000 |
| Expenses on which TDS deducted but deposited late on 14 Aug | 30000 | 35000 |
The due date of ITR is 31 July
View answer
| Year 1 | |
| Computation of PGBP Income | |
| Profit as per P& L A/c | 2000000 |
| Add | |
| Expense Disallowed | |
| TDS Deposited after due date of ITR (30000*30%) | 9000 |
| Expense Allowed | |
| PGBP INCOME | 2009000 |
| Year 2 | |
| Computation of PGBP Income | |
| Profit as per P& L A/c | 2500000 |
| Add | |
| Expense Disallowed | |
| TDS Deposited after due date of ITR (35000*30%) | 10500 |
| Expense Allowed | |
| TDS of Last Year deposited this year (30000*30%) | 9000 |
| PGBP INCOME | 2501500 |