23 September 2010
facts 1. company is in a business of proving employees to the company on contract basis 2.co raises bill of actual salary payable to employees + service charges + service tax. 3. company pays salary to all concerned in first week of next month. 4. but company raised invoices in month of april and may 09 for the services rendered in the month of jan feb and march 09. 5. In some cases, it was also found that tds certificate of current period includes the amounts which are of previous period according to companies invoices but not accounted for, in previous year, neither by co nor by deductor.
question : 1.whether these service charges are considered prior period ? 2. what will be accouing treatment? 3. or as invoices raised in current period these are considered as currect period transactions. 4. what is the solution for point no. 5. can i treat it as current years invoices or require disclosure? i am confused. pl clarify the situation.
23 September 2010
Accounting aspect- This is a prior period income so book as prior period income.
TDS aspect- Service receiver company not credited the liability in previous year, that is the reason TDS has been deducted in current year. You have to claim TDS credit in current year IT Return.
CAclubindia
