04 January 2012
Madam / Dear Sir, My client maintains books of accounts on accrual basis. However TDS is deducted on on his income on receipt basis. Eg:- Suppose he raises an invoice of 1,50,000/- on 31st Jan 2011 and receives payment in two installments of90,000/- on 30th Mar 2011 and60,000/- on 30th April 2011. TDS is deducted by the clients on this invoice as and when payments are made to him i.e R. 9,000/- on 30th Mar and6,000/- on 30th April. Thus TDS credit is available to him in two different financial years although he claims the whole income in one financial year.
So how should I go about this? Should I also book income on receipt basis to claim proportionate TDS? or after booking1,50,000/- as income in one, can I claim the remaining TDS of 6,000/- in the next year even though I book no income in the next year against it?
And in case I avail the second option will it cause problem if the case comes under scrutiny?
Even though Rs.60000 is paid after March, provision entry shall be made person who will make the payment. So at the time of making the provision, TDS is to be deducted and the same shall have to be furnished in Q4 return. Then this accrual / receipt question will not arise.
I tell you one thing. There is a problem in getting TDS credit if you have not claimed it as per Form 26AS.
CAclubindia
