TDS of Prior period

[chaganti srinivas]

Dear Sirs, As per the latest Income tax circular, TDS from transporter is nil from 01.10.2009. If the service rendered by transporter is prior to 01.10.2009 and submits the bill after 01.10.2009, is TDS Deductable ? - Please clarify.

[DEV KUMAR KOTHARI]

See sub-sections (1) and (6) and (7) of section 194C as substituted w.e.f. 01.10.2009. The date of credit or payment which ever is earlier is relevant for TDS. Date of submission of bill is not relevant, in case you have provided liability or paid some advance earlier. In case a/c of party is credited on or after 01.10.09, new provision will apply. In case any payment ws made or partys a/c was credited before 01.10.09, then the old rate will apply. Before not doing deduction, you must obtain valid PAN of party and file details / form to the concerned authority in a form which is yet to be prescribed.

[Surender Gupta]

The views of Mr. Kothari are laudable. All depend on the date the amount is credited in the books of account or the date on which the payment is made.

AI Summary

TDS applicability for transporter services depends on the date of credit or payment, not bill submission. The substituted section 194C effective 01.10.2009 makes the earlier of the date of credit to the payee's account or the date of payment determinative for TDS on transporter services; bill submission date is irrelevant if liability arose or advance was paid earlier. If the account is credited on or after 01.10.2009 the amended provision applies, otherwise the prior rate governs. Payers must obtain the payee's PAN and file prescribed details/forms before deciding not to deduct.