How to claim tds (urgent)
This query is : Resolved
30 July 2012
In previous year i.e 2011-2012 for first six month i entered into agreement with a company to provide services of engineering for its machineries located through out U.p through amy proprietorship firm. & raised two bills of Rs. 177000 & 208000/- dated 30-6-2011 & 30-10-2011 respectively. but due to some misunderstanding Company didnt deducted my TDS in that previos year,And now saying that they will deduct tax in this F.Y 2012-2013 & will show there expense in this year.
For the rest of six month of previous year i.e september2011 to march 2012 i joined the same company as employee for which tds deucted properly & i got form no. 16.
Problem is that if i show such income as my this year income on due basis(as per service tax rules) & pay tax accordingly than can i claim tds in next financial year when i will not show any income from business because in that year i will be in employment for full year.
The hardship is that if i will show this income in next year i will be taxed in 20% slab for this professional income because in that i year i will be earning around 6 lacs through myy salary.
Therefore i want to show that income in this year only which is genuine too as i have only six month salary as my income this year as Rs. 3,00,000/- approx.
therefore after deducting expenses from my professional income i want to pay tax on such income in this f.y year only because my total income will be less than Rs. 500000/- & hence i have to pay tax @ 10%.
Can I do so & claim Refund of Tds deducted by co. in f.y 2012-13 when actualy i am having no business income in that f.y.2012-13.
Department will allow me refund or will it ask for amount credited by co. during the year is not shown by you in your return for f.y 2012-13. & i have to proof to department that i have already included such income in my previous year income i.e 2011-2012 & had paid tax accordingly.
For the rest of six month of previous year i.e september2011 to march 2012 i joined the same company as employee for which tds deucted properly & i got form no. 16.
Problem is that if i show such income as my this year income on due basis(as per service tax rules) & pay tax accordingly than can i claim tds in next financial year when i will not show any income from business because in that year i will be in employment for full year.
The hardship is that if i will show this income in next year i will be taxed in 20% slab for this professional income because in that i year i will be earning around 6 lacs through myy salary.
Therefore i want to show that income in this year only which is genuine too as i have only six month salary as my income this year as Rs. 3,00,000/- approx.
therefore after deducting expenses from my professional income i want to pay tax on such income in this f.y year only because my total income will be less than Rs. 500000/- & hence i have to pay tax @ 10%.
Can I do so & claim Refund of Tds deducted by co. in f.y 2012-13 when actualy i am having no business income in that f.y.2012-13.
Department will allow me refund or will it ask for amount credited by co. during the year is not shown by you in your return for f.y 2012-13. & i have to proof to department that i have already included such income in my previous year income i.e 2011-2012 & had paid tax accordingly.
30 July 2012
TDS can be claimed in the year of receipt irrespective of the fact that bill is shown in another year.
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03 August 2012
In previous year i.e 2011-2012 for first six month i entered into agreement with a company to provide services of engineering for its machineries located through out U.p through amy proprietorship firm. & raised two bills of Rs. 177000 & 208000/- dated 30-6-2011 & 30-10-2011 respectively. but due to some misunderstanding Company didnt deducted my TDS in that previos year,And now saying that they will deduct tax in this F.Y 2012-2013 & will show there expense in this year.
For the rest of six month of previous year i.e september2011 to march 2012 i joined the same company as employee for which tds deucted properly & i got form no. 16.
Problem is that if i show such income as my this year income on due basis(as per service tax rules) & pay tax accordingly than can i claim tds in next financial year when i will not show any income from business because in that year i will be in employment for full year.
The hardship is that if i will show this income in next year i will be taxed in 20% slab for this professional income because in that i year i will be earning around 6 lacs through myy salary.
Therefore i want to show that income in this year only which is genuine too as i have only six month salary as my income this year as Rs. 3,00,000/- approx.
therefore after deducting expenses from my professional income i want to pay tax on such income in this f.y year only because my total income will be less than Rs. 500000/- & hence i have to pay tax @ 10%.
Can I do so & claim Refund of Tds deducted by co. in f.y 2012-13 when actualy i am having no business income in that f.y.2012-13.
Department will allow me refund or will it ask for amount credited by co. during the year is not shown by you in your return for f.y 2012-13. & i have to proof to department that i have already included such income in my previous year income
i.e 2011-2012 & had paid tax accordingly.
For the rest of six month of previous year i.e september2011 to march 2012 i joined the same company as employee for which tds deucted properly & i got form no. 16.
Problem is that if i show such income as my this year income on due basis(as per service tax rules) & pay tax accordingly than can i claim tds in next financial year when i will not show any income from business because in that year i will be in employment for full year.
The hardship is that if i will show this income in next year i will be taxed in 20% slab for this professional income because in that i year i will be earning around 6 lacs through myy salary.
Therefore i want to show that income in this year only which is genuine too as i have only six month salary as my income this year as Rs. 3,00,000/- approx.
therefore after deducting expenses from my professional income i want to pay tax on such income in this f.y year only because my total income will be less than Rs. 500000/- & hence i have to pay tax @ 10%.
Can I do so & claim Refund of Tds deducted by co. in f.y 2012-13 when actualy i am having no business income in that f.y.2012-13.
Department will allow me refund or will it ask for amount credited by co. during the year is not shown by you in your return for f.y 2012-13. & i have to proof to department that i have already included such income in my previous year income
i.e 2011-2012 & had paid tax accordingly.
28 July 2024
To address your situation regarding the TDS on your professional income and the implications of showing the income in a different financial year, here is a structured approach:
### **1. Understanding the Situation**
1. **Income and TDS Details:**
- You provided services in FY 11-12 but the company did not deduct TDS in that year.
- The company plans to deduct TDS in FY 12-13 and will account for the expense in that year.
- You joined the company as an employee in FY 11-12 and had TDS deducted from your salary.
2. **Income Tax Implications:**
- If you show the professional income in FY 11-12, you will be taxed at the applicable slab rates of that year.
- If the professional income is shown in FY 12-13, you will be taxed as per the slab rates of that year, but you will not have business income in FY 12-13.
### **2. How to Handle the Income and TDS**
#### **1. Reporting the Income**
**Income in FY 11-12:**
- Since you provided the services in FY 11-12, the income should ideally be reported in that year. This is consistent with the "due basis" of accounting where income is recognized in the year it is earned.
**Income in FY 12-13:**
- If the income is reported in FY 12-13, you would need to adjust your tax calculations to account for the TDS deducted in that year.
#### **2. Claiming TDS in FY 12-13**
- If you report the income for FY 11-12 but the TDS is deducted in FY 12-13, you will need to claim the TDS refund in FY 12-13.
**Steps to Follow:**
1. **File Your Return for FY 11-12:**
- Report the professional income and pay taxes as per the applicable slab rate for FY 11-12. Include all eligible expenses to determine the taxable income.
2. **File Your Return for FY 12-13:**
- Report the income as per your employment.
- Claim the TDS deducted by the company in FY 12-13 against the professional income as TDS.
**Example Calculation:**
For FY 11-12:
- Professional Income: ₹1.77L + ₹2.08L = ₹3.85L
- Expenses: [List eligible expenses]
- Taxable Income: Professional Income - Expenses
For FY 12-13:
- Report the salary income.
- Claim TDS on the professional income that was deducted in FY 2012-13.
- The total TDS will be accounted for against the total income.
### **3. Documentation and Proof**
- **Form 16A:** Ensure that you obtain Form 16A from the company showing the TDS deduction for FY 12-13.
- **Supporting Documents:** Keep records of the invoices, payments received, and any correspondence with the company regarding the TDS.
- **Tax Returns:** Ensure both FY 11-12 and FY 12-13 returns are correctly filed and clearly show income and TDS details.
### **4. Addressing Potential Queries**
- **Departmental Queries:**
- If queried, you may need to provide a detailed explanation and proof of the income earned in FY 11-12.
- Explain the mismatch and provide evidence showing that the income was reported and taxes paid in FY 11-12.
- **Claiming Refund:**
- If TDS is claimed in FY 12-13 but the income was reported in FY 11-12, ensure you have proper documentation and explanations ready for the tax authorities.
### **Conclusion**
1. **Report Income in the Correct Financial Year:** Report the professional income in the year it was earned (FY 2011-12). However, if TDS is deducted in FY 12-13, you must claim it in the return for FY 12-13.
2. **Claim Refund:** Claim the TDS deducted in FY 12-13 while filing your return for FY 12-13, and ensure that you have the necessary documentation to support your claim.
3. **Consult a Tax Professional:** For complex situations, consult a tax professional who can help you navigate through these issues and ensure compliance with tax regulations.
Following these steps should help you address the issue and ensure that you correctly account for both the income and the TDS.
### **1. Understanding the Situation**
1. **Income and TDS Details:**
- You provided services in FY 11-12 but the company did not deduct TDS in that year.
- The company plans to deduct TDS in FY 12-13 and will account for the expense in that year.
- You joined the company as an employee in FY 11-12 and had TDS deducted from your salary.
2. **Income Tax Implications:**
- If you show the professional income in FY 11-12, you will be taxed at the applicable slab rates of that year.
- If the professional income is shown in FY 12-13, you will be taxed as per the slab rates of that year, but you will not have business income in FY 12-13.
### **2. How to Handle the Income and TDS**
#### **1. Reporting the Income**
**Income in FY 11-12:**
- Since you provided the services in FY 11-12, the income should ideally be reported in that year. This is consistent with the "due basis" of accounting where income is recognized in the year it is earned.
**Income in FY 12-13:**
- If the income is reported in FY 12-13, you would need to adjust your tax calculations to account for the TDS deducted in that year.
#### **2. Claiming TDS in FY 12-13**
- If you report the income for FY 11-12 but the TDS is deducted in FY 12-13, you will need to claim the TDS refund in FY 12-13.
**Steps to Follow:**
1. **File Your Return for FY 11-12:**
- Report the professional income and pay taxes as per the applicable slab rate for FY 11-12. Include all eligible expenses to determine the taxable income.
2. **File Your Return for FY 12-13:**
- Report the income as per your employment.
- Claim the TDS deducted by the company in FY 12-13 against the professional income as TDS.
**Example Calculation:**
For FY 11-12:
- Professional Income: ₹1.77L + ₹2.08L = ₹3.85L
- Expenses: [List eligible expenses]
- Taxable Income: Professional Income - Expenses
For FY 12-13:
- Report the salary income.
- Claim TDS on the professional income that was deducted in FY 2012-13.
- The total TDS will be accounted for against the total income.
### **3. Documentation and Proof**
- **Form 16A:** Ensure that you obtain Form 16A from the company showing the TDS deduction for FY 12-13.
- **Supporting Documents:** Keep records of the invoices, payments received, and any correspondence with the company regarding the TDS.
- **Tax Returns:** Ensure both FY 11-12 and FY 12-13 returns are correctly filed and clearly show income and TDS details.
### **4. Addressing Potential Queries**
- **Departmental Queries:**
- If queried, you may need to provide a detailed explanation and proof of the income earned in FY 11-12.
- Explain the mismatch and provide evidence showing that the income was reported and taxes paid in FY 11-12.
- **Claiming Refund:**
- If TDS is claimed in FY 12-13 but the income was reported in FY 11-12, ensure you have proper documentation and explanations ready for the tax authorities.
### **Conclusion**
1. **Report Income in the Correct Financial Year:** Report the professional income in the year it was earned (FY 2011-12). However, if TDS is deducted in FY 12-13, you must claim it in the return for FY 12-13.
2. **Claim Refund:** Claim the TDS deducted in FY 12-13 while filing your return for FY 12-13, and ensure that you have the necessary documentation to support your claim.
3. **Consult a Tax Professional:** For complex situations, consult a tax professional who can help you navigate through these issues and ensure compliance with tax regulations.
Following these steps should help you address the issue and ensure that you correctly account for both the income and the TDS.
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