02 October 2011
Dear Friends, I need guidance on the following issue:
A is a foreign citizen and working in India since July 2010 as a consultant engaged by an Indian o. on a monthly remunaration of Rs 3.5 lacs since July 2011. The company has been deducting TDS regularly on payment made to A.
On 21st March, 2011 A incorporated a Pvt. Ltd. co. in India. The company for which A is working issued all the TDS certicates in A ame but for Ja,Feb & March qtr. the TDS certifcate has been issued in the name of A's co. amonting to rs 11 lacs appx.
This has a servious implication of TDS & Service tax. A has not filed his income tax retiurn f 2010-11 so far nor his company.
Now issues are arising:
1. A's Com. was incorporated on 21st March 11 how can it book an Income of Jan,Fe & march 2011. 2. Going by the TDS certifcate issued in favour of A's company, its receipts are more than Rs 10 lacs in 2010-11 so it was supposed to charge service tax and deposit the same and service tax return for 2010-11 by relevant date. Whareas it has not done so.
Queries:
1. Can A ask his employer to give all TDS certfcates in his name instead of his company. To me this solution will be better becuase A 's company will totally out of implication of TDS and service tax in 2010-11. But that depends, how A's employer co-operates.
2. If A's employer does not change the TDS certifcates can A's company book income of Jan-March on receeipt basis.The payment hs been received partly by A is his name and partly in the name of A's Company.
3. What other best option could be possible keeping in view that no return of Incoe Tax and service tax has been paid by A and his company.
02 October 2011
Firstly Mr A got wrong TDS certificates. He can ask his deductor to get correct TDS certificates in his name. However this is on assumption that he had raised bill in his personal name & not in the name of his company.
Secondly question of booking of income by A Co does not arise as it was income of A & not A Co. Once revised TDS certificate are received A can file his return of income. His employer must file revised TDS return too.
CAclubindia
