TDS

This query is : Resolved

Girish Sharma (Querist)
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02 August 2010 One of my client has given deposits in Sept 09 for 10 months on which he received interest. The borrower has paid interst for the period Sept09 to July10 of Rs.90000/- and deducted and deposited TDS of Rs.9000/- and issued form16A for AY 2011-12.
My client has accounted the above interest on accrual basis upto March Rs.60000/- and Rs.30000/- in the next year.
My query is how he will get the tax credit in view of the provisions of Rule 37BA(3) read with Section 199 for the AY 2010-11.

CA Kapil B Gupta

CA Kapil B Gupta (Expert)
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02 August 2010 TDS is deducted as and when it is accured or paid whichever is earlier.

In case of borrower, interest from sep 09 to July 10 is accounted for and paid at the same time and tds was deducted accordingly in FY 2010-11.

You should be file your client return for AY 2010-11 on accrual basis and whole TDS will be considered only in AY 2011-12.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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03 August 2010 Your client has done the correct thing by doing the accrual basis accounting

Though , whole Tax credit can be availed only in AY 2011-12.

Further,,, Total interest received during FY 10-11, can be adjusted By. Rs. 60000/-(already entered during FY 09-10 as accrued interest)