TDS not deducted: Assessee not in default subject to condition !
Any sum payable to a resident on account of interest, commission or brokerage, Rent, Royalty, fees for professional services or, technical services payable to a resident, or amounts payable to a contractor or sub-contractor being resident for carrying out any work on which tax is deductible at source and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in section 139(1) of Income Tax Act 1961. Then 30% of any sum payable shall be disallowed.
Where the tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in section 139(1), than 30 % of such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been deducted and paid.
Also where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso of section 201(1), then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso.
First proviso to Section 201(1)
Any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of the Chapter XVII-B on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) has paid the tax due on the income declared by him in such return of income,
and the person furnishes a certificate to this effect from an Chartered Accountant in Form 26A.
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