194-C- Interest Liability

[Asked by Guest]

Dear All,

Please guide me on the following issue:

A company has received a bill of Rs. 18000 for vehicle running expense during April. The Company did not deduct TDS as limit of 30,000 as well as 70000 was not applicable at that time.

Now on January end the contractor has raised a bill of Rs. 48000 and the company expects that the transaction with the contractor would exceed 70000 and hence it deducted TDS on the current as well as the previous amount.

Please guide me with reference to case laws (if any) whether interest on delay deduction of TDS applicable on earlier sum, i.e. 1% per month.

Regards

CA.Suman Sharma

AI Summary

TDS on contract payments: delayed withholding can attract interest from the date TDS became liable until deduction is made.
The issue concerns whether interest for delayed TDS deduction applies when an earlier contractor bill did not at that time require withholding but a subsequent bill causes statutory thresholds to be exceeded. The withholding rule triggers on either a single payment exceeding the single-payment threshold or aggregate payments (including those likely to be paid) exceeding the aggregate threshold. Interest on delayed deduction runs from the date TDS was liable to be deducted - typically the earlier of credit in books or payment - until actual deduction, and applicability turns on whether the payer reasonably anticipated aggregate liability.