Whether default of TDS is not allowed in Income Tax Act?

Yes, default in TDS can lead to disallowance of expenses and penal consequences.

📌 As per Section 40(a)(ia):

“30% of any sum payable to a resident on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified… shall not be allowed as deduction in computing the income chargeable under the head ‘Profits and gains of business or profession’.”

In Simple Terms:

If TDS is:

• Not deducted – 30% of such expense is disallowed.

• Deducted but not deposited within due date of ITR filing (Sec 139(1)) – 30% is disallowed.

✅ However, if TDS is paid later, the disallowed amount is allowed as deduction in the year of actual payment.