TDS deduction on services instead of no income in books??????

[milan bamal]

"An LLP firm is constructing a warehouse in its own name. Currently, there is no income in the Profit & Loss account; only expenses related to goods, consultancy, and services are being recorded. As per the Income Tax provisions, TDS is required to be deducted on certain expenses. However, the firm has not deducted TDS on any of these service-related expenses so far, despite the applicability of the TDS threshold limits on some expenses. Is it mandatory to deduct TDS even though there is no income at present?"

AI Summary

TDS deduction obligation applies even without current income or profits, when specified service payments cross thresholds.
Tax deduction at source under the Income-tax Act is not dependent on the payer's present profitability or existence of income in the profit and loss account. A person responsible for making payments for contractual work, professional or technical services, consultancy, or other specified categories must deduct TDS when the relevant sum is credited or paid, whichever is earlier, if the applicable threshold conditions are met. The obligation applies even where an LLP is in the project or construction stage and has not yet commenced revenue-generating operations.