Income declared in current year bt tds deducted in next year

ITR 2218 views 4 replies

SHUBHASHIS NAG

Taxation Manager

31 Points Joined December 2010

Dear Experts,

One of my client (e.g. XYZ Pvt. Ltd.) maintains its account on accrual/mercatile basis and recognised an income in current year (e.g. FY 2014-15) after completion of service to its client (ABC Enterprises). However, ABC Enterprises maintains its accounts on cash/receipt basis and it has booked the TDS of above payment to XYZ Pvt. Ltd. in next year (e.g. FY 2015-16).

Now, while filing ITR XYZ Pvt. Ltd. is offering above income to tax on accrual basis but in the TDS-Schedule of ITR form the TDS of next year cannot be claimed unlike unclaimed TDS of earlier years.

But as per Sub rule 3 of Rule 37BA of Income Tax Rules credit of TDS will be allowed only in the year in which income corresponding to that TDS is assessable.

Now, my question is how can we deal with this issue and how can we claim the TDS.

Replies (4)

S. Shiroor

Others

1212 Points Joined July 2015

IF RS 100 IS THE FEES THEN

XYZ should book rs 90 as in income in Fy 2014-15 and TDS Nil

It should book rs 10 as income in AY 2015-16 and TDS Rs 10

I hope i am correct on this bcoz I am not from accounts field.

Experts also throw some light on this.

SHUBHASHIS NAG

Taxation Manager

31 Points Joined December 2010

Dear Shiroor Sir,

As per income tax act, if we are following mercantile method of accounting then we have to declare the whole income in current year only.

S. Shiroor

Others

1212 Points Joined July 2015

My accounting is on receipt basis and my clients accounting on mercantile basis.

I have to take TDS over number of years. Bank receipts plus TDS pertaining to those Recipts is gross recipts. 26AS , Income Tax ITR and Service tax statements match with each other. The Surplus TDS is carried over. Service Tax is also based on (Bank receipts + appropriate TDS) only..

sonu chowdhry

student

22 Points Joined November 2011

we are also facing the same problem as asked above in our case income is recorded on mercantile basis and also shown in GST return of FY 18-19 but TDS on this income is deducted in next year by client hence 26AS not reflecting TDS amount in FY 2018-19 but reflecting in 26AS of FY 2019-20 .

now if we declare full income in FY 2018-19 then claim of TDS will not available to us and we have to pay full tax .further we cannot take credit of TDS of Next years/ following years in current year due to system not supporting this situation. in system there is only brought forward and carry forward option is available

similarly in next year i.e FY 2019-20 form 26AS reflecting excessive income including income which is already declared in FY 2018-19 and tds on which is generally deducted at lower rate and income will be taxable at higher rate 30%

that means there will be further mismatch with 26AS in next year .

please anyone share the solution of this problem here if you know it.

thank you