Answer

1. F

   Facts

   Yes. Under Sec 40(a)(ia) of the 1961 Act, 30% of an expense paid to a resident is disallowed if TDS on it was not deducted, or was deducted but not paid by the return due date. It is allowed in the year the TDS is later paid.

2. P

   Provisions and law

   • Sec 40(a)(ia), Income-tax Act 196130% of an expense is disallowed if TDS on it was not deducted or paid by the return due date (2025 Act number to be confirmed)
   • Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025)A deductor who fails to deduct or pay TDS is treated as an assessee in default
3. A

   Analysis

   Example: a trader paid ₹5,00,000 to a transporter without TDS. 30% of ₹5,00,000, that is ₹1,50,000, is added to income for FY 2025-26, which can mean extra tax of around ₹46,800 at 30% plus cess. Paying the TDS before the due date avoids it. If paid later, the ₹1,50,000 is allowed in the year of payment.

4. C

   Conclusion

   1. 1List payments where TDS was missed
   2. 2Deduct and pay before the return due date where possible
   3. 3Compute the 30% disallowance for any unpaid TDS
   4. 4Claim it in the year you pay the TDS
   5. 5Keep the challan with your books

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.