15 July 2010
A company has recd some commission Income in AY 2010-11 and accordingly booked the same in the accounts. However, the other party has booked the expenditure in AY 2011-12 and accordingly the TDS is deducted in AY 2011-12. Can the company book TDS Credit for AY 2011-12 in advance? What could be the alternative treatment in the books of the company?
15 July 2010
YOU HAVE TO SHOWN IT IN AY 2010-11 AS ADVANCE. AND BOOKED AS INCOME IN AY 2011-12, BECAUSE PARTY HAS CLAIMED IT ALSO IN THIS YEAR. BY THIS WAY YOU CAN CLAIMED TDS CREDIT ALSO EASILY. UNTIL & UNLESS OTHER COMPANY BY WHICH YOU HAVE RECD AMOUNT , HAS NOT BOOKED IT as EXPENSE, THEN HOW YOU CAN TREAT IT AS INCOME.
15 July 2010
Sir, Thank you for replying. The other company has claimed it as expenditure and also issued the TDS Certificate but in the AY 2011-12. However, the company which has recd the money wants to the show the Income in AY 2010-11. Accordingly, it has shown the Income in P&L A/c and TDS as TDS Receivable AY 2011-12 in its books though the credit for the same is not claimed. Is the approach adopted by the company is correct? Whether it can claim TDS Credit in next year & show Income in current year?
15 July 2010
NO, IT IS BETTER TO SHOW INCOME & TDS IN AY 2011-12. OTHERWISE IT MAY BE POSSIBLE THAT AO ISSUE NOTICE YOU IN AY 2011-12 FOR UNDER-ESTIMATE THE INCOME.
15 July 2010
the company can show income in the AY 10-11 and claim TDS in the same year i.e., 10-11. TDS is allowed in the year in which income related to that TDS is shown. pl. read section 199 of the Act
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