Deduction of TDS on Advance Payment

1) If such transaction pertains to FY 20-21, then you are required to generate invoice in FY20-21.

2) If you intend to generate invoice during April 2021, then you may raise either a single or separate invoice(s) in respect of both.

3) In case you choose to opt for (2), then TDS credit can be utilized only during the FY21-22 (i.e. during the year in which the invoice is raised).

Thanking You Poornima,

I have Opt (2) in your response above, 

Now my Query is, Since TDS Debited in March 2021 & Deposited by LLP in March 2021

How to show it as an Advance Payment against work for which bill was raised in New Financial Year..

Can you be Plz provide any circular or reference letter any document against it , as my tax consultant is not accepting this, and asking me how can i show 1 payment in 2 different financial Years.

He is all confused about it.

It was possible to Claim the TDS deposited by any firm in last financial year in current Financial Year.

Will it be solution to this.

1) Advance received will be shown as Advance from Debtors under Current Liability in the balance sheet.

2) Yes, TDS credit can be carried forward to the subsequent year (fill up the ITR accordingly)

I don't understand what do you mean by showing 1 payment in 2 different financial years. Here you have received 2 different payments (in different FYs) and raised a single/separate invoice(s).

Payment received in March will be Recorded in March 2021, will be shown as Income in FY20-21, with TDS rebate in Same Financial Year,

While invoice will be made in April 2021 i.e. in Next Financial Year

as per Accrued Income Concept.

It will be correct way right of dealing in this case.

If invoice is generated in April 21, then how can the transaction be an income for the previous year? There is no concept of provision of income. Only provision of expense is an allowable deduction.

As expense can be shown in advance in last FY, then Credit can also be shown in last FY with as Advance against work.

If you have received advance in FY20-21 and the supply (of goods/service) is made during FY21-22, then revenue can be recognized only after supply.