Tds deduct under 194h
This query is : Resolved
24 October 2017
Some party's deduct TDS under 194H in 2017-18 but this TDS arouse in the year 2016-17. So can we get claim in the current year if YES. Plz say how to pass entries.
24 October 2017
Yes you can claim the TDS in current year. Account for TDS in current year and claim.
24 October 2017
TDS of 2016-17 has to be claimed in 2016-17 itself though deduction is made in
2017-18.
2017-18.
24 October 2017
Sir how can TDS be claimed before deduction. The TDS amount will also not be appearing in 26AS.
24 October 2017
Gupta Ji
My observation is as per rule 37BA (3)(i).
My observation is as per rule 37BA (3)(i).
27 July 2025
Got it! Here's the scoop on TDS under **Section 194H (Commission or Brokerage)** when TDS is deducted in a different year than when income arose:
---
### Can you claim TDS credit in the year TDS is deducted (current year) even if income arose in previous year?
**Yes**, you can claim TDS credit in the year when the tax was actually deducted and deposited (i.e., when you receive the TDS certificate), irrespective of when the income arose.
---
### Why?
* Income tax credit is given based on the **year of deduction and deposit of TDS**, not the year income was earned.
* This is because TDS is a tax deducted at source **on payment or credit**, whichever is earlier.
* So, if TDS is deducted in 2017-18 but relates to income for 2016-17, the credit for that TDS will appear in 2017-18 only.
---
### How to pass accounting entries?
Assuming you didn’t recognize TDS in books earlier, pass entries in the current year (year of TDS deduction):
```plaintext
1) TDS Receivable A/c Dr
To Commission/Brokerage A/c
(Being TDS deducted on commission/brokerage received)
2) Bank A/c Dr
To Commission/Brokerage A/c
(Being commission received net of TDS)
OR if commission was already recognized, just pass:
TDS Receivable A/c Dr
To Commission/Brokerage A/c
(Recognizing TDS receivable)
```
When you get the TDS certificate or file your return, claim the credit.
---
### Summary
| Scenario | TDS credit claim year |
| -------------------------------------------------------------------------- | ---------------------------------------------------- |
| TDS deducted in next FY (e.g. 17-18) on income of previous FY (e.g. 16-17) | Credit available in the FY when TDS deducted (17-18) |
---
Need help drafting the exact entries in your books based on your accounting method?
---
### Can you claim TDS credit in the year TDS is deducted (current year) even if income arose in previous year?
**Yes**, you can claim TDS credit in the year when the tax was actually deducted and deposited (i.e., when you receive the TDS certificate), irrespective of when the income arose.
---
### Why?
* Income tax credit is given based on the **year of deduction and deposit of TDS**, not the year income was earned.
* This is because TDS is a tax deducted at source **on payment or credit**, whichever is earlier.
* So, if TDS is deducted in 2017-18 but relates to income for 2016-17, the credit for that TDS will appear in 2017-18 only.
---
### How to pass accounting entries?
Assuming you didn’t recognize TDS in books earlier, pass entries in the current year (year of TDS deduction):
```plaintext
1) TDS Receivable A/c Dr
To Commission/Brokerage A/c
(Being TDS deducted on commission/brokerage received)
2) Bank A/c Dr
To Commission/Brokerage A/c
(Being commission received net of TDS)
OR if commission was already recognized, just pass:
TDS Receivable A/c Dr
To Commission/Brokerage A/c
(Recognizing TDS receivable)
```
When you get the TDS certificate or file your return, claim the credit.
---
### Summary
| Scenario | TDS credit claim year |
| -------------------------------------------------------------------------- | ---------------------------------------------------- |
| TDS deducted in next FY (e.g. 17-18) on income of previous FY (e.g. 16-17) | Credit available in the FY when TDS deducted (17-18) |
---
Need help drafting the exact entries in your books based on your accounting method?
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