TDS (certificates ) deducted by customers.

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shashank (Querist)
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26 September 2008 I have two queries regarding TDS
1) We have finalised the accounts prior to receipt of TDS certificates from customers. Now I have received the certificate which has higher value than what was reflected in financials.can i take the whole amount of certificate as TDS in IT return or only the amount shown in the financials?

2) I have made few provisions for TDS deduction for which we belived we would receive the certificates & reversed the provision on 01/04/08. We received the certificates for lesser amount.Now what amount should we continue in the TDS 2007-08 account.
Eg.Before provision we had amount of 8lacs in TDS 2007-08 account, we made a provision of 2 lacs as on 31/03/08 so my financials reflected the amount as 10lacs.
I reversed the provision on 01/04/08 of 2lacs. and we received the certificate for 9 lacs. Now what amount should ideally be reflected in the TDS 2007-08 account: 10lacs as per financials or 9 lacs as per certificate, as on date.
We have made the provision as we book the TDS when we receive the cheque from customers and they deduct on the basis of bill booking.

I know these queries are too long but can anyone share knowledge !! Thanks & Regards

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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26 September 2008 1) If the certificate is defective you have to get it rectified.
2) How will you make provision for receivable? The question is not clear.

CHEZHIYAN

CHEZHIYAN (Expert)
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26 September 2008 Your Question is not Clear

shashank

shashank (Querist)
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27 September 2008 Sir,
for que.1)Say my signed balance sheet shows the TDS deducted as 100,000 whereas i have received certificate of 130,000? The difference is due to : customers has deducted TDS on credit basis, whereas we get the details when they pay the bill amount.(Bill amount - TDS = Cheque amount)according to the customers the TDS certificate is correct as we have submitted the bills befre 31/03/08 and they have deducted TDS while booking the bill.

For que 2 ) This situation is just reverse of above, as we have submitted the invoice before 31/03/08 we assumed that customers will deduct the TDS on booking basis, we calculated the TDS amount before receipt of payment, but customers have booked the bills post 31/03/08 and deducted the TDS post 31/03/08, hence we would not receive the TDS certificate for the year 2007-08. Now pls go through above questions.

RAMPRASAD

RAMPRASAD (Expert)
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29 September 2008 For question number 2 first, the entry would be TDS Receivable Dr & Debtors Cr. These both are Balancesheet items. Hence won't affect your profitability. I think instead of crediting Debtors you would have credited a provision account. Even then your profitability is not affected.

I presume you have doubt in accounting not on Income tax treatment.

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