04 May 2010
Sir One of my client deduct tds only at the time of making the payment to client. Without considering date of invoce for exa mple date of invoice :- 01.05.2009 date of payment ;- 10.09.2009 in this case they do not record the transaction on 01.05.2009 and neither deduct the tds on the same date. they record the transaction on 10.09.2009 and deduct tds acordingly. my question is that is it correct
04 May 2010
he is correct but at the time of assessment assesing officer can not satisfy by this way he can impose penality for Tax evesation and interest can be demond. if in any special reason its as per rule. dont worry.
04 May 2010
I do not see infirmity in the procedure adopted. Invoice date is not at all relevant. Transaction date, Invoice date, Entry date and payment date can be different. For TDS purpose, the only date of credit or payment whichever earlier is relevant.
The deductor's action is perfectly within the framework of law.
04 May 2010
Not agree with Mr shyam lal, you can not change the method of accounting once it is adopted. so, other than a proprietorship firm the a/cs are to be maintained on accrual basis,in that case a/c maintained on payment basis is not correct.
05 May 2010
Accural system of accounting does not mean that the bills should be accounted on the date of the bill. Even in the absence of bills, transaction should be recorded so as to reflect the reasult during the period under consideration. The date of the bill does not normally correspond with the date of transaction. The certification of the bill also takes time.
Further, the transaction can be recorded on cash basis during the year. The outstanding/provision are taken care of on the last date of the accounting year in compliance with accural system. The view that the accounts should be prepared on accural basis every month, irrespective of accounting period is misplaced.
CAclubindia
