TDS certificate received in advance

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Anil Kumar Kedia (Querist)
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17 July 2008 My question is as a Advocate, Advocate is mainting his accounts on payment and receipt basis. He received a demand draft dated 31.03.08 in april 5th Fy 2008-09 from his Company client, Company has deducted TDS on this payment. My question is :- What accounting entry is to be passed in Advocate Books and what will be the impact of TDS certificate for the FY 2007-08.
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Shyam Lal Naik

Shyam Lal Naik (Expert)
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17 July 2008 Credit of tds will be allowed in the year in which the related income is offered for taxation. The new return has coloumn to take care of such contingencies. Since the advocate is maintaining accounts in cash basis, the following entry is suggested.

31.3.2008
TDS dr
Party Cr

05.04.08
Bank dr
Party dr
Fee Income Cr

Tds should be shown in the the FY 07-08 Return, but nothing will be claimed. It will be claimed in FY 08-09.

Look forward to more replies.

CA. Vineet Grover

CA. Vineet Grover (Expert)
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17 July 2008 Hi Anil,

Credit for TDS certficate shall be availed in the year in which the icome is recognized and charged to taxation.

In your case,

As the books are maintained on payment basis, income shall be recognized in the F Y 2008-09 and the credit shall be availed in that year itself.

There will be no accounting entry in the books of the advocate in the F Y 07-08 nor he need to disclose the transaction in his return of income.

Rgds/
Vineet