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44ada gross receipts

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Mugdha

30 Points Posted on 02 October 2020

I am a lawyer self employed and wish to file returns under 44ada.do we need to include the amounts if invoice is raised but not paidby client in same financial year..if client paid in April 2020 but tds he filed in April with march 2020 date..now tds shows income in earlier year but actually payment received in next year. In which year should I consider it ? Presently while filling returns or next year when. Actual payment is received

Replies (3)

Quick Summary

This discussion clarifies how to handle gross receipts under Section 44ADA when invoices are raised but not paid within the financial year. The key is to consistently follow either the mercantile or cash system of accounting. If you use the mercantile system, all raised invoices count as income regardless of payment. If you use the cash system, only payments received in the year are recognised as income, and TDS on unpaid invoices needs to be carried forward.

CA ABHAY GUPTA

Practice

3235 Points Posted on 02 October 2020

Firstly decide whether you follow Mercantile system of accounting or cash, if Mercantile then you need to show all invoices irrespective of payment received or not against such invoice, if follow cash then whatever you receive will shown as income, further in case follow cash system you need to carry forward the amount of tds deducted on invoices you don't claim as receipt for the year..

Mugdha

30 Points Posted on 02 October 2020

I am the tax payer and have not maintained balance sheet..the section says gross receipts..not sure how that is considered by it department..since TDs is deposited this year