Sir,
We raise invoice on parties. Party enter in their books after TDS. and paid us after TDS. When we receive the Payment only then we account for TDS.At the end of the year some payment are received after 31st march and we account for TDS after 31st march.In this case party gives us the TDS certificate for more amount and our accounts show less tds recievable.
Now, i want to know is this the right accounting method. How we should do accounting for this difference of TDS.
We are a service providing industry.
Thanks
Ganesh aggrawal
dear ganesh,
You are following cash basis of accounting and the person deducting the tax are following accrual basis . In the long run it will be better for you if you switch for accrual basis.
But in the present cash you dont have to do anything, you account for as you are doing and for assesment purpose you may have to provide a reco. statement.
CAclubindia
