TDS amount to be claimed in which year ?
This query is : Resolved
05 October 2009
FACTS:
A Firm of Chartered Accountants is maintaining its accounts on cash basis and filed its Return of Income for the financial year 2008-09 with in the prescribed time on 30.6.2009.
During the current financial year 2009-10, the said Firm received an audit fees on completion of the audit of a company for the financial year 2008-09 after deduction of TDS on 20.8.2009 and passed the following entry in its books of accounts:
Dr. Bank A/ 18000
Dr. TDS A/ 2000
Cr Prof. Fees 20000
As the accounts are being maintained on cash basis, it has shown Rs. 20000/- as income for the financial year 2009-10. So far as TDS of Rs. 2000/- is concerned, it will be claimed as deduction from tax payable or will be claimed as refund as the case may be when the said Firm will file its Return of Income for the financial year 2009-10. This is the practice which is being followed by the CA Firm for the last so many years.
QUESTION:
1 Whether the TDS of Rs. 2000/- should have been claimed in the Return of Income for the financial year 2008-09 ? And if not, whether a revised Return is to be filed ?
2 Whether the said TDS of Rs. 2000/- can be claimed in the financial year 2009-10 in which the fees has actually been received by the Firm after filing the previous years Return.
3 If the said TDS is to be claimed in the Return of the previous financial year 2008-09 (Asst. Yr. 2009-10), then what will be the entry in the books of CA Firm as on 31.3.2009 ?
4 Whether it would be correct to account for part income (TDS Rs.2000/-) in previous accounting year and part (Balance Fees Rs.18000/-) in the next financial year ?
5 What is the general practice adopted by CA Firms in this regard ?
A Firm of Chartered Accountants is maintaining its accounts on cash basis and filed its Return of Income for the financial year 2008-09 with in the prescribed time on 30.6.2009.
During the current financial year 2009-10, the said Firm received an audit fees on completion of the audit of a company for the financial year 2008-09 after deduction of TDS on 20.8.2009 and passed the following entry in its books of accounts:
Dr. Bank A/ 18000
Dr. TDS A/ 2000
Cr Prof. Fees 20000
As the accounts are being maintained on cash basis, it has shown Rs. 20000/- as income for the financial year 2009-10. So far as TDS of Rs. 2000/- is concerned, it will be claimed as deduction from tax payable or will be claimed as refund as the case may be when the said Firm will file its Return of Income for the financial year 2009-10. This is the practice which is being followed by the CA Firm for the last so many years.
QUESTION:
1 Whether the TDS of Rs. 2000/- should have been claimed in the Return of Income for the financial year 2008-09 ? And if not, whether a revised Return is to be filed ?
2 Whether the said TDS of Rs. 2000/- can be claimed in the financial year 2009-10 in which the fees has actually been received by the Firm after filing the previous years Return.
3 If the said TDS is to be claimed in the Return of the previous financial year 2008-09 (Asst. Yr. 2009-10), then what will be the entry in the books of CA Firm as on 31.3.2009 ?
4 Whether it would be correct to account for part income (TDS Rs.2000/-) in previous accounting year and part (Balance Fees Rs.18000/-) in the next financial year ?
5 What is the general practice adopted by CA Firms in this regard ?
06 October 2009
1. no need to revise
2. tds can be claimed in Fy 09-10 (rule 37BA)
3. tds not to be claimed in previous Fy
4. yes perfectly correct under cash system
5. as above
2. tds can be claimed in Fy 09-10 (rule 37BA)
3. tds not to be claimed in previous Fy
4. yes perfectly correct under cash system
5. as above
10 May 2012
I am very surprised that a CA firm is itself not following the Accounting Standards prescribed by ICAI.
AS 1 requires that accounts shall be maintained on accrual basis and not on cash basis.
AS 1 requires that accounts shall be maintained on accrual basis and not on cash basis.
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