Difference with Turnover and 26AS

This query is : Resolved

Shalini RN (Querist)
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06 August 2024 We are registered GTA and we had raised our invoices for the transportation charges related to March-24 in the month of Apr -24 and accordingly GST returns were done. But one of our customer has taken provision of 26 lacs and has filed his TDS return. Now our auditor is telling that we need to pay income tax on that 26 lacs. But then there will be difference in turnover with ITR and GST returns. What is the solution for this. If we pay income tax on 26 lacs then the turnover mismatch will continue for next financial year also as that customer will again book provision in his books and file tds return accordingly. Please advice what we can do for this mismatch

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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13 August 2025 What’s happening?
You raised invoices in April 2024 for March 2024 services, so GST returns report revenue in April.
Your customer took a provision of ₹26 lakhs for March 2024 and deducted TDS on that amount, reporting it in 26AS for March.
Your auditor says you must pay income tax on that ₹26 lakhs now (based on TDS reflected in 26AS), but you don’t recognize that income till April 2024.
If you pay tax on ₹26 lakhs in this financial year, your turnover in ITR will be higher than in GST returns, causing mismatch.
This pattern may repeat every year if your customer continues to book provisions before actual invoicing.
Solutions & Best Practices
1. Income Recognition Consistency
Income should be recognized as per invoice date and accounting policy (you recognized it in April 2024, which is correct).
You should pay tax on income when invoiced, not when provisioned by the customer.
2. Explain Timing Difference to Auditor & Tax Authorities
Prepare a reconciliation statement showing the difference arises due to the customer’s early provisioning and timing difference.
Maintain documentary evidence: invoices, contract terms, communication.
3. Coordinate with Customer
Request the customer to deduct TDS based on actual invoice date, not on provision.
This avoids recurring mismatch in future.
4. Claim TDS Credit Correctly
Since TDS is deducted and reflected in 26AS (even if timing differs), claim credit for the TDS in your income tax return.
This ensures you are not taxed twice, just the timing differs.
5. Do Not Include Provision Amount in Turnover Before Invoice
Do not include the provisioned amount in your income until you raise the invoice.
GST turnover should match invoice date as per law.

Final Advice:
This mismatch is common when customer and supplier have different accounting policies.
The key is documentation and communication.
If needed, get a certificate or letter from the customer confirming the timing difference for your tax audit.

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