FRIENDS,
IN SUB CONTRACTOR IN CONSTRUCTION BUSINESS , TDS CERTIFICATE HAS BEEN ISSUED BY CONTRACTOR COMPANY ON PAYMENT BASIS AND IN THE SAME WAY ADVANCE GIVEN IN MARCH FOR SITE TO BE COMPLETED IN APRIL AFTER DEDUCTING TDS.AND THE SAME IS MENTIONED IN TDS CERTIFICATE.
SO TELL WHETHER THIS ADVANCE TO BE CONSIDERED AS INCOME OR THIS ADVANCE AND CORRESPONDING EXP. RELEVANT TO THIS ADVANCE TO BE SHOWN AS WORK IN PROGRESS.AND IF WE CAN NOT BIFURCATE CORRESPONDING EXP. RELATING TO ADVANCE THEN WHAT TO DO????
PLS HELP
ANKUR(C.A.)
6 Replies
Anurag
(13 Points)
Replied 10 May 2007
The entries in your books will be determined by your accounting policies and not the accounitng policy of any third party . You have to follow AS-7 in this respect.
aldj
(13 Points)
Replied 10 May 2007
The One Says:
How is it that you are having a doubt about Advance being considered as Income? Yes, I think Anurag has given you the correct solution.
How is it that you are having a doubt about Advance being considered as Income? Yes, I think Anurag has given you the correct solution.
Ankur
(112 Points)
Replied 10 May 2007
THANKS FOR OPINION
BUT WHAT I WANT TO KNOE THAT IF ADVANCE IS NOT CONSIDERED AS INCOME THEN WHAT ABOUT TDS DEDUCTED AND MENTIONED IN TDS CERTIFICATE FOR THAT YEAR.....HOW CAN WE CLAIM THAT TDS IN BEXT YEAR??
PLS HELP
ANKUR
BUT WHAT I WANT TO KNOE THAT IF ADVANCE IS NOT CONSIDERED AS INCOME THEN WHAT ABOUT TDS DEDUCTED AND MENTIONED IN TDS CERTIFICATE FOR THAT YEAR.....HOW CAN WE CLAIM THAT TDS IN BEXT YEAR??
PLS HELP
ANKUR
sdalfj
(13 Points)
Replied 10 May 2007
The One Says:
The Income as per Books of Accounts and Income as per Income Tax Rules will be different in most cases. This is the reason AS-22 for Deferred Tax & its treatment has been introduced.
If it is treated as income in the current year (i.e. previous year in tax lingo) then question of claiming TDS in next year does not arise.
Now if you have received any advance which is treated as advance under income tax rules then you cannot claim TDS for that in the current year but can claim TDS for the same only in the year in which it is treated as income. Therefore you will have to check and change the TDS certificate accordingly.
Please as for further clarification if need be....
(Ankur my friend kindly use lower case - it makes for easier reading)
The Income as per Books of Accounts and Income as per Income Tax Rules will be different in most cases. This is the reason AS-22 for Deferred Tax & its treatment has been introduced.
If it is treated as income in the current year (i.e. previous year in tax lingo) then question of claiming TDS in next year does not arise.
Now if you have received any advance which is treated as advance under income tax rules then you cannot claim TDS for that in the current year but can claim TDS for the same only in the year in which it is treated as income. Therefore you will have to check and change the TDS certificate accordingly.
Please as for further clarification if need be....
(Ankur my friend kindly use lower case - it makes for easier reading)
Ankur
(112 Points)
Replied 10 May 2007
thanks
party who has issued tds certificate has refused to change tds certificate and even refused to issue confirmation of account.and continued to show tds deducted from advance amount.if we dont consider advance as income then payment shown as per tds certificate and our p&l wont match.and we ahve to claim that tds in next year without tds certificate.
one mid way solution i think is that client makes bill for exactly amount as shown in tds certi as advance in back date and consider as income of current year.
whether it works?? if ok then all confusion regarding claiming tds in next year is solved
pls help.
ankur
party who has issued tds certificate has refused to change tds certificate and even refused to issue confirmation of account.and continued to show tds deducted from advance amount.if we dont consider advance as income then payment shown as per tds certificate and our p&l wont match.and we ahve to claim that tds in next year without tds certificate.
one mid way solution i think is that client makes bill for exactly amount as shown in tds certi as advance in back date and consider as income of current year.
whether it works?? if ok then all confusion regarding claiming tds in next year is solved
pls help.
ankur
aldjf
(16 Points)
Replied 10 May 2007
The One Says:
My friend Ankur you seem to be in quite a situation ...... get in touch with the clients Chartered Accountant / Auditor / Accountant so you can have a proper[size=14] rational[/size] discussion. Other than that you really cannot do much more.
My friend Ankur you seem to be in quite a situation ...... get in touch with the clients Chartered Accountant / Auditor / Accountant so you can have a proper[size=14] rational[/size] discussion. Other than that you really cannot do much more.
Recent Topics
- INCOME TAX AY 25-26
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- GST Invoices Series
Related Threads
CAclubindia
