TDS on Bonus.

[Pratyush Parashar]

Dear Sir,

Company declares performance bonus in the month of June'13 for the Financial Year 2012-13. What would be the tax treatment (TDS) for this bonus? Whether TDS is deducted for the FY 2012-13 or FY 2013-14?

[Guest]

Dear Sir

If the amt of bonus liability determined in March 13 ,we should deduct TDS & deposit by April 13 ,file our return by 15th May 13 & may actually pay in June 13

However if there is no TDS liability for Bonus then we can book the liability even for 2012-13 in June 13

but if there is TDS liability then also we can book it but the return may either be late sent or they will be revised & expense booked for 2012-13

[Deepak Whorra]

This reply does not answer the question but raises more issues

[sanjeev bajaj]

Performance Bonus  to employees is part and parcel of Salary assessable under the Head  "Income under the head Salary" hence tds has to be made u/s 192,of the Income Tax Act, 1961 which allows the deduction of tax at the time of payment.

Hence, TDS at the time of payment

AI Summary

Clarification on TDS Deduction Timing for Performance Bonus under Section 192: Deduct at Payment Time, Not Liability Determination. A company inquired about the tax treatment for a performance bonus declared in June 2013 for the financial year 2012-13, specifically whether TDS should be deducted for FY 2012-13 or FY 2013-14. One response suggested that if the bonus liability was determined in March 2013, TDS should be deducted and deposited by April 2013, with returns filed by May 15, 2013. Another response clarified that performance bonuses are part of salary, and TDS should be deducted under section 192 of the Income Tax Act at the time of payment.