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Does a company pay taxes on accounts receivable
We are service base company. We give service 2 client at Feb month. And client told us give invoice next financial year ( April). Now point is I show this service bill receivable asset side in balance sheet. Now someone told that this income disallowed if your client not deducted tds at march. Now I'm confused please help me.... What I do
Replies (1)
You are service base company so any service you provide to your clients will be shown as sales as accounting is done on accrual basis so as you have given services in month of feb so you have to book this as sales for the month of feb and it will be shown as debtors in balance sheet and ypu will pay tax on the income for FY19-20 later when they will pay ypu wont show them in p&l anddirectly reduce it from balance sheet
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