I am a consultant. I had a pending payment from a client which should have been paid in March 2012 but due to some delays I was paid in June 2012. But in a recent review of my Form 26AS I have noticed this client has filed that the payment was made in March 2012 and TDS was deducted on the same date.
When I file my ITR4 should I treat this amount as if it has been received before March 31st and include it in this years return or should I show the amount in next years returns.
From the extracts of the case, it appears that the services were rendered in March 2012 so it would be taxable in the previous year itself
account TDS in this year and income next year if your are maintaining your accounts cash basis i.e received basis
Totally Agree with shankar sir.
Also i think your client must have made provision in his books of account for your services rendered to him and deducted TDS accordingly filed TDS return becuase he is following accrual basis of accounting. so it is correct compliance on his part.
Dear Ram,
The income has to be treated that of the previous year, and TDS can be claimed for that income.
In the income tax return, you can declare this income and claim TDS against it.
Regards
The client might have a passed a provision entry in the month of March 2012 just to book expense for his accrual based accounting and deducted TDS on at tht tym he might have paid it later, So what your 26AS is showing is correct that refers to that he has made the TDS paymernt and not the payment for your services which as you say is received in june so as per accounting policy of accrual system u can claim the TDS receivable in the IT Return for FY 2011-12 and book the income in the same year as claiming income in the next year would erroneous and breach of the accrual concept,for mpre detailed and further clarification consult your CA, incase u still have any queries....!!! Hope this explanation would be beneficial...!!!!
Dear Ram
What they have done is correct, You also show your income in previous year and claim TDS as showing in your 26AS - Regards
| Originally posted by : Gunjan Tulsyan | ||
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The client might have a passed a provision entry in the month of March 2012 just to book expense for his accrual based accounting and deducted TDS on at tht tym he might have paid it later, So what your 26AS is showing is correct that refers to that he has made the TDS paymernt and not the payment for your services which as you say is received in june so as per accounting policy of accrual system u can claim the TDS receivable in the IT Return for FY 2011-12 and book the income in the same year as claiming income in the next year would erroneous and breach of the accrual concept,for mpre detailed and further clarification consult your CA, incase u still have any queries....!!! Hope this explanation would be beneficial...!!!! Agree wid the above explainition |
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the client has claimed tds on due or receipt basis whichever is ealier ....
so you can claim the TDS as per form26 AS
Dear Jigar,
Rule of Payment or credit whichever is earlier is for deduction of TDS and not for claiming TDS Credit..
I would like to humbly request you to clear your concept and then reply to anyone's queries because your irresponsible answer can mislead others who are in doubt.
And also it will be better for your future career.
Regards
Thank You everyone for your replies. They have answered some of my doubts. I understand there is some divided opinion on the subject. It will be helpful if you can give some more clarifications.
I am maintaining my accounts in Cash Basis. From what I understand. I should just follow my Form 26AS and claim this particular TDS credit in FY 2011-12 even though the actual payment was made in FY 2012-13.
But in my Income Statement should I declare this payment in this years returns or next years? If I claim TDS this year and declare corresponding Income next year is that correct procedure. Or if I claim and declare both in this years return itself will I be doing the correct thing?
Thank you all once again.
Dear Mahesh ji,
Credit can only be taken when the deduction is made by the deductor, who is responisble for tds deduction....so please understand the basic taxation purpose...for what the rules r made... there is something logic behind it..
I hope u understand this sir...
better you can claim TDS as per 26AS statement. otherwise you have to carry forward you claim by creating provision entry. if your accounting is cash basis.
CAclubindia
