Originally posted by : TusharSampatM.Com CA,CS-FINAL
	Originally posted by : CA AYUSH AGRAWAL Originally posted by : TusharSampatM.Com CA,CS-FINAL Originally posted by : CMA. CS. Sanjay Gupta Generally by 31st March we know who is going to do Audit. So auditor is consulted before making the provisions and deducting TDS thereon. Have never faced any difficulties as yet regarding provision of audit fees. I AGREE WITH HIS OPINION AND IN MY CASE ALSO MY SIR PREFRES TO RAISE INVOICE NEXT YEAR i.e after the year of audit gets over AND TAKE THE CREDIT NEXT YEAR ONLY so as to AVOID revising the returns and all other problems. But Generally Client Pays TDS in P.Y Only, TThen in 26AS of CA, TDS Credit Shown in PY Only Not in AY ...So How CA Can Take TDS Credit That is why clients must be advised to pay only after 1/4 of AY so all the problems wat u mentioned will not arise at all and credit can be taken next year itself.

Tushar, Read Carefully, I Think You are Not on Point I raised...I am Here for Discussing TDS...& Claiming Expenses in Same Year by Client & TDS Credit by CA

Suppose Say in Year 11-12, if TDS Not Paid Pertaining for 11-12, Then How Client Can Claim Expenses of Audit Fees in 11-12..???

Originally posted by : Amit Singh
	Generally, What we do is we send a quotation to our client in the month of feb & march for provision specfying the TDS to be deducted & net amount to be paid for the Audit to our regular client & for other (if they came late) we tell them we will make a provision of less than 30000 (limit for deduction of TDS)  & in next year we raise the differential amount bill.

I think this is the right solution for clients and Professionals (CA/CS/CMA) too. 

Sec 40(a)ia has been ammended by finance Act 2010 and whic has now allowed that IF TDS IS DEDUCTED BEFORE 31.3.2012 (AS IN UR EXAMPLE )

BUT IS PAID UPTO 30/9/2012 IN CASE OF COPORATE WHIC IS DUE DATE FOR FILLING OF RETURN OF INCOME AS  PER 2ND EXPLAINATION TO 4TH

PROVISO TO SEC 139(1) SO ULTIMATLEY IT WILL BE ALLOWED TO CLIENTS FOR TDS PAID AND DEDUCTED UPTO 30/9/2012 FOR THE FY 11-12  (CLIENTS

HAV THE TIME EVEN AFTER FINALISING THEIR ACCOUNTS TILL 30.9.2012  SO THEY CAN ADJUST IT IN THEIR BOKSOFACCOUNTS TILL THEY ARE ADOPTED FINALLY)

Ideally before making provision for audit fees on 31st March, the client should discuss with CA and finalise the audit Fees to be paid and thereafter only provsion entry to be passed and Tds returns etc should be filed. I have seen this Practice in the audit of Large Size companies.

Say in respect of Audit of FY 2011-12.

Fees Booked and TDS deducted on 31.03.2012. Returned filed in respect of FY 2011-12. Credit available to Professional in Assessment Year 2012-13.

Now i think question of Ayush is that bill is raised and payment is received much later in FY 2012-13. So how do professional account for above income and pay Tax thereon and claim TDS since return filing due date is many cases will be 31st July 2012? Any by that time most audits are not complete, neither bills raised nor payments received.

Originally posted by : CMA. CS. Sanjay Gupta
	Say in respect of Audit of FY 2011-12. Fees Booked and TDS deducted on 31.03.2012. Returned filed in respect of FY 2011-12. Credit available to Professional in Assessment Year 2012-13. Now i think question of Ayush is that bill is raised and payment is received much later in FY 2012-13. So how do professional account for above income and pay Tax thereon and claim TDS since return filing due date is many cases will be 31st July 2012? Any by that time most audits are not complete, neither bills raised nor payments received.

Yes, Apart From This, Client  Not Fix Generally CA Fees, It Decided Only At Time of Invoice Only in May a Cases, Because Sometimes Fees M<ay Changed by CA ....so How CA Can Claim TDS Credit in a.y. 11-12.since he lready filed RoI.

Many CA Practice to Take Credit of TDS in Next Year and Book Income in 11-12.

Its Not Correct .....

A crystal clear approach should be adopted by all.

At the time of making provision both the auditor and auditee should be aware of the fees. Both should provide for the Audit fees in same FY as Income and Expenses respectively. Then there will be no issue in filing return and claiming TDS. Last moment finalization is not a good practice.

Originally posted by : CMA. CS. Sanjay Gupta
	A crystal clear approach should be adopted by all. At the time of making provision both the auditor and auditee should be aware of the fees. Both should provide for the Audit fees in same FY as Income and Expenses respectively. Then there will be no issue in filing return and claiming TDS. Last moment finalization is not a good practice.

Yes, That is The Perfect Solution as Written in Book as bylaws...

But Practicaly Even You Know Its Not Possible.....

Many firms do follow this. So here intention is required. If intention is there then it is always possible.

Usually, our auditor remains us before finalisation.....Thats the usual & best practice.

Companies while passing entries for "outstanding expenses " as on 31st March, usually reconciles all its purchase/expense/income accounts. Accordingly, the Audit fees payable will also arise as a question and shall be referred to the Chartered Accountant. In that case, following are the possible scenarios.

Option-1: If CA could project his audit fees to the client then no issues in all parts.

Option-2: If CA doesn't want to project his audit fees in March as he may prefer to raise the bill based on the volume of the client's business. Then, the issue arises. In that case,  both the CA and the client have to book this transaction on "cash basis" system year by year to avoid legal consequences.

Originally posted by : Ranganathan K
	Companies while passing entries for "outstanding expenses " as on 31st March, usually reconciles all its purchase/expense/income accounts. Accordingly, the Audit fees payable will also arise as a question and shall be referred to the Chartered Accountant. In that case, following are the possible scenarios. Option-1: If CA could project his audit fees to the client then no issues in all parts.   Option-2: If CA doesn't want to project his audit fees in March as he may prefer to raise the bill based on the volume of the client's business. Then, the issue arises. In that case,  both the CA and the client have to book this transaction on "cash basis" system year by year to avoid legal consequences.

Only a Single Transaction One Cant Book Cash basis..Either merchantile or Cash But Fully.......

Secondaly Income Tax Follow FY and AY Concept.....

TDS Credit Can be Taken Only After Showing in 26AS.

and if Client Pays in 11-12, then How Can CA Claim Credit......

Ok, now let me ask one question.

CA follows "cash basis" system and the client follows "mercantile system". What will happen???

Originally posted by : Ranganathan K
	Ok, now let me ask one question. CA follows "cash basis" system and the client follows "mercantile system". What will happen???

Yes, That Could be...

but only assessee or CA Cant Follow Two Different Policy in Different Transaction.....

and even if ca follows cash basis then also he can book expenses or income cash basis.....but tds credit can be taken on only 26AS basis........

Many CAs nowadays are facing problems in collecting their Audit Fees.I learned in my training that my CA asks client to make a provision of Audit fees,deduct TDS on 31st March and accordingly pay and file his return next year before due dates.My CA files his return on 31st March next year i.e. If provision is made in F.Y.2011-12. Return of CA is filed on 31st March,2013 for A.Y.2012-13. Client can easily show exp on audit fees at time of return filing if he has deducted on or before 31st March and paid TDS upto the date of return filing. I think there should not be any problem for CA to claim TDS Credit shown in 26AS.

Sometimes there are errors in 26AS even if u have filed ur TDS Returns timely.