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TDS Deduct on Advance Income or Not

Ashish Sharma (Service) (1028 Points)

29 September 2010

Hi,

If TDS deducted by Debtors on advance, but Bill not raised in that F.Y., Is advance is to take as income or not.

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Priyanka sah (Students) (108 Points)
Replied 29 September 2010

First of all i would like to tell you that debtor will never deduct TDS. we use debtor word for supplier of material or treding goods only.

I agree there may be some person who receive srevice and make payment to service provider on advance and deduct TDS.

In this case If service provider has not issued bill in the FY when TDS deducted and Account is maintained in Accrual basis then he can make provision of sale if service is provided and book income in the same FY

If service is not provided and bill is also not raise then do not book income in this FY and book in Next financial year but remember that do not claim TDS credit in income tax return in this FY. You book sale in next FY and also Take benefit in income tax return in Next year.

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Harpreet (* * * * * *) (1670 Points)
Replied 29 September 2010

I am agreed with Ms Priyanka Sah

Ashish Sharma (Service) (1028 Points)
Replied 29 September 2010

Hi,

Thanks Priyanka for reply, but the main issue is Can i take credit of any TDS Certificate issued for F.Y. 2009-10 in F.Y. 2010-11. As I know if assessee not claims his TDS in same F.Y. then assessee can not claim in next F.Y..

Priyanka sah (Students) (108 Points)
Replied 29 September 2010

Hi ashish

Your question is 100% Valid. but i would share you that if you not claim TDS credit in the year when TDS deducted then you can claim it in next year. But there is some implication which we seen practicaly in my earlier firm that AO creates so much dispute for allowing this.

so it is better to claim in same year.

But AO again creates dispute that why income has not been considered

So it is better to take income in same year and claim credit in same year