18 October 2009
I assume you are referring to partnership books of account and also that you are referring to the practise of debiting the partners account for the TDS of past years being adjusted. The logic is that once the return for, say, AY 2008-2009 has been submitted, the TDS for AY 2008-2009 is adjusted in the account of the partners, as it forms a part of the income-tax assessment for the assessment year 2008-2009, whether there is a refund or not, as the income-tax liability of the firm stands reduced by the figure of TDS. For example, if the tax on income before TDS is Rs. 10,000/- and TDS is Rs. 8,500/- then the net liability is Rs. 1,500/-, which is either covered by advance tax or paid as self-assessed tax. Hence the need to write off TDS against partners accounts.
CAclubindia
