As per the Income Tax Act, books of accounts can be maintained either in cash/mercantile system w.r.t professional Income received. But, for one of my client, TDS has been deducted in the previous year (mar 10) but the same amount has been received in the current year. (say July 10), wherein huge tax with interest is coming. As far as I know, we can claim the TDS only if the corresponding income is offered to tax. But in this Case, since the proessional income is not yet received for the previous year, and since the books of accounts are maintained under cash system, I can not account this towards income. Since, both of the above concepts are contradicting (Method of book keeping vs. offering income based on TDS deduction), kindly let me know if there is any other way where I can offer the income on receipt basis. (Kindly provide relevant section/case laws regarding to this). Also, Please let me know the practicle procedure to file the tax return as at the time of offering income to tax (A-yr 11-12), I can not import TDS from 26AS as it would be reflecting in the A-yr 10-11.
Regards
Lakshmi Devanand
CAclubindia
