Tds on earler year bills recognised in books in current year

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2011 Dear All,
If a company has to recognise an Expense of Freight in Current Year for an expense which relates to 2007-08 (When TDS was applicable on Freight) whether TAX is deductible on it when there is NO TDS liability as on date.

Secondly If the other company providing Transport Service has already recognised its income can claim the credit of TDS deposited Today?

Please Advice.....

VISHRUT

VISHRUT (Expert)
Follow

17 November 2011 No TDS is required to be deducted if there is NO TDS liability on the same as on date.

But if TDS is applicable on freight at that time than TDs have to deduct on accrual basis only i.e. at the time of recognising the expenditure.

The person can claim TDs only in the year in which the income is booked so it will also able to claim TDS on the same.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2011 Dear Vishrut,
Thanx for your opinion,

But still, i am not clear that whether tax is required to be deducted or not?

Co. is not recognising the expense on accrual basis because the same was under some dispute which has settled now and the company has agreed to pay the amount.

Upgrade to CAclubindia Pro. Subscribe Now!