TDS on Advance to Contractor-How to claim-Urgent

This query is : Resolved

CA.Tarun Maheshwari (Querist)
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27 February 2009 We are a contractor. We were given advance from a party which deducted TDS on the advance payment. No billing was made to that party in current year. How shall we claim the TDS, if no income is there. Should the TDS be carried forward for next year and proportionately credit should be taken in the years of billing, like the method that has been discussed in case of Advance rent (Circular No. 5/2001), or is there any other circular u/s 194C. Please clarify the procedure as soon as possible.

Jitender

Jitender (Expert)
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27 February 2009 if u are following mercantile system of accounting then tds will be claimed in next year as tds can be claimed in the year of its taxability.

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CA.Tarun Maheshwari

CA.Tarun Maheshwari (Querist)
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27 February 2009 Sir, is there any circular in this regard??

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K V Subba Rao

K V Subba Rao (Expert)
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27 February 2009 Please check the following link in which a similar query has been answered the same way Sri Jitender did

http://www.taxworry.com/2006/11/claim-tds-in-year-you-show-income.html

However, departemental circular is not traceable at the moment

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CA.Tarun Maheshwari

CA.Tarun Maheshwari (Querist)
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27 February 2009 I also got a reply in my personal id that from 1-4-2008 section 199 has amended and as per amendment the tax deducted shall be treated as the tax paid by deductee. So if person deposits excess advance tax (and/or Deposited by deductor on behalf of the deductee) during the financial year, he can claim it as refund.