TDS adjustment

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Kumar Gaurav (Querist)

11 May 2010 Hi,

I have a question regarding TDS.

Case: I am a partner of the IT firm, so my job is to sell the licenses to clients. When the deal is finalized with client I raised order to the IT firm they provide the licenses.

Now I get the payment from the lcient after TDS deduction and when I make the payment to IT fim I deduct the TDS from their amount also.

some figure:
I purchased license in Rs. 100 with 5% margin and I am selling at 105 including service tax and vat etc. No I get the amount from my client after TDS is 105-10.5 (roughly TDS at 10%) = 94.5/-. Now I have to mae payment for 100 Rs then I pay I firm Rs 90 and deposit 10 rs with govt.

so what I made = 100 (expense) - 94.5 (income) = -5.5

so this is a loss for me, it goes like this or can we adjust tds paid by client while depositing the TDS for IT firm.

Please help me to understand.

Thanks,
Kumar

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

11 May 2010 No you cannot adjust like this, becasue what ever you are deducting TDS for your Suppliers for Income but your customer deducting TDS for your income

Kumar Gaurav

Kumar Gaurav (Querist)

12 May 2010 so this become loss for me mean while I claim the tds amount after filing return or anything else I can do here to maintain some liquidity for the business.

-Kumar

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

12 May 2010 Here. TDS is the statutory norms you cannot avoid and also what ever deducted by your client on your bill and deposited in your accoount only.so you can plan some other way for fund management

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