Can my expenses be disallowed if I don't deduct TDS?

Question

tdsguru.in (CA firm) · Accepted Answer

Yes — 30% of a payment to a resident is disallowed if TDS is not deducted or not deposited in time; 100% of certain payments to non-residents can be disallowed. Under the equivalent of Section 40(a)(ia), 30% of a sum payable to a resident is disallowed if TDS was not deducted, or was deducted but not deposited by the return due date. The disallowance is reversed in the year the TDS is eventually deposited. For payments to non-residents, the disallowance can be the full 100% of the expense. This makes timely deduction and deposit important not just for TDS compliance but for your own income-tax assessment.