TDS On Provision For Expenses - IBM Case

Recently, the Bangalore Bench of the Income-tax Appellate Tribunal in the case of IBM India Private Ltd. held that the taxpayer is liable to deduct tax on provision for expenses created in the books of account. The Tribunal rejected the taxpayer’s argument that there was no charge under Section 4(1) of the Income-tax Act, 1961 and held that statutory provisions dealing with collection and recovery of tax, envisage collection of tax irrespective of charge under Section 4(1) of the Act.

This KPMG note analyses the case and the implications of the ITAT order…

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