Dear sir,
If the tax deduction at source is made earlier year and tds certificate is issued for earlier year can the credit be claimed in the current year if it had not been claimed in earlier years
CA Dipanweeta Mukherjee (Proprietor) (102 Points)
14 March 2010Dear sir,
If the tax deduction at source is made earlier year and tds certificate is issued for earlier year can the credit be claimed in the current year if it had not been claimed in earlier years
![[CA] Mathew](/img/blank.gif)
[CA] Mathew
(Chartered Accountant)
(46 Points)
Replied 14 March 2010
Yes it can be claimed.
TDS does not fall under the law of limitation Act in principle and hence you can claim it in the subsequent years if not the same year. In fact we filed the returns for various individuals and companies pretty much 2-3 years later and even though they did not accept it initially they acknowledged the returns later on. It depends on the relationship with the ITO as well. There are some cases where some TDS certificates were ommitted to be included in the original return and hence the return was revised.
Technically there is no limitation in my view and experience. Hope this helps.
kumarsatish022
(Professional)
(165 Points)
Replied 14 March 2010
yup, i agrees one can claim except for salary as law itself provides , to claim expemditure as and when TDS is paid , thanks
Prasad R
(CA Final)
(2128 Points)
Replied 14 March 2010
Dear Dipanweeta,
The credit of TDS cannot be claimed for earlier years in current year. section 199 read with Rule 37BA on TDS Credit says that TDS can be claimed for the year for which "income is assessable". In my opinion it cannot be claimed in the subesequent year. File a revised return for the earlier AY for which u have received the certificate.
The text given in bold is given to substantiate my opinion.
The following section and rules to be noted in this regard
"
3[Credit for tax deducted.
199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be.
(2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made.
(3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules3a as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given.]
Further the relevant rules are as follows :
6a[Credit for tax deducted at source for the purposes of section 199.
Rule 37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority.
(2) (i) If the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for tax deducted at source shall be given to the other person in cases where-
(a) the income of the deductee is included in the total income of another person under the provisions of section 60, section 61, section 64, section 93 or section 94;
(b) the income of a deductee being an association of persons or a trust is assessable in the hands of members of the association of persons, or in the hands of trustees, as the case may be;
(c) the income from an asset held in the name of a deductee, being a partner of a firm or a karta of a Hindu undivided family, is assessable as the income of the firm, or Hindu undivided family, as the case may be;
(d) the income from a property, deposit, security, unit or share held in the name of a deductee is owned jointly by the deductee and other persons and the income is assessable in their hands in the same proportion as their ownership of the asset:
Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).
(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.
(iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody.
(3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.
(ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.
(4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of –
(i) the information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorized by such authority: and
(ii) the information in the return of income in respect of the claim for the credit,
subject to verification in accordance with the risk management strategy formulated by the Board from time to time.]
The above section and rules in bold makes it clear that the TDS credit will only be allowed for the AY in which such income on which TDS is deducted is assessable.The focus for giving TDS credit is based on the Income Assessable in the AY. Since the TDS cert received in CY for the earlier AY does not pertain to Income Assessable in the Current Year such credit cannot be claimed.
However you can file a revised return for the earlier AY for which u have received the TDS certificates during the current year and claim the TDS credit pertaining to earlier AY.
This is my opinion looking forward to others opinion as well in this regard.
Regards
Prasad R
Prasad R
(CA Final)
(2128 Points)
Replied 15 March 2010
Thanx Vijay sir for ur affirmation
Thanx Ketan
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