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Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2014 if tds deducted on income recieved is not claimed then income should be net of tds or gross?

CA Tejas Mistry

CA Tejas Mistry (Expert)

05 December 2014 Income will be taxed on gross basis even if TDS is not claimed

Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2014 where is tds amount adjusted then? Which a/cing head

CA Tejas Mistry

CA Tejas Mistry (Expert)

06 December 2014 For accounting purpose you have to enter TDS amount but as TDS is not claimed in Income Tax Return then Income will be taxed in Gross amount basis

Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2014 but asset definition says asset to be recognised if future economic benefit is expected to be recieved but as tds is not claimable then the benefit criteria is not satisfied, plz help

Querist : Anonymous

Querist : Anonymous (Querist)

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

27 July 2025 Great question! This is a classic accounting vs tax treatment issue. Here's how to look at it:

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### Accounting perspective on TDS not claimed:

* **Asset recognition:**
As per accounting principles (Ind AS or IFRS), an asset is recognized if it represents a future economic benefit.
If TDS is deducted by the payer but you have not claimed/refunded that TDS from tax authorities, **there is no certainty that the benefit (refund) will be realized**.
Therefore, the TDS amount should **not be recognized as an asset** in the books.

* **Accounting treatment:**

* You record the **full income gross** (without deducting TDS) in your revenue.
* The TDS deducted but not claimed should **not be recorded as receivable or asset** because you have no right to recover it yet.
* Effectively, the income recorded is gross but the cash you actually receive is net of TDS.

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### Tax perspective:

* Income is taxable on **gross amount**, even if TDS is deducted but not claimed.
* You must include the entire income before TDS in your taxable income.
* The TDS amount will remain as **tax deducted but not claimed as credit** (so you lose that amount unless you file to claim refund or adjust).

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### Summary:

| Aspect | Treatment |
| -------------------- | ------------------------------------------ |
| **Income shown** | Gross (full income without deducting TDS) |
| **TDS asset?** | No asset recognized if TDS not claimed |
| **Accounting entry** | Income: full amount, no receivable for TDS |
| **Taxation** | Income taxed on gross amount |

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If you want, I can help you with sample journal entries for this. Would you like that?

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