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Income vs tds - ay mismatch

yuvak (Practising CA) (144 Points)

13 April 2012

Hi,

If recepient has offered the 'Income' in earlier years but the payer of such income accounts for the same in subsequent year (and deducts TDS), how will the recepient get credit for such TDS? (especially u/s 199 rw rule 37BA)

Cheers

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3 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 13 April 2012

I think, that the receipietn whould file his return without taking the credit of TDS from the total taxx payable, if TDS certificate is not received on or before the due date of filing the return. subsequently a revised return can be filed to calim the TDS receivable & refund can be claimed. the provision of the sub-Rule 37(i) reads as follows:

(3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.

Hence revised return can be filed after receipt of TDS certificate for the A.Y. to whihc the TDS relates.

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yuvak (Practising CA) (144 Points)
Replied 14 April 2012

Hi Giridhar,

Sorry but you got my question wrong.

The issue is that the Recepient accounted amounts receivable from a Payer and has offered this as 'Income' in the earlier years. Now, the payer has to actaully discharge these amounts and wants to deduct TDS on the entire payment. But the recepient has already offered this amount as his Income earlier. If TDS is deducted by the payer, to claim this TDS credit, the recepient will have to again offer this amount as 'Income' (sec 199 rw rule 37BA).

Any thoughts??

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 15 April 2012

Sub-rule (3) clearly states that the credit for the TDS shud be given for the A.Y. to which the income relates. So I don't think that the income wud be again be offered for taxation, as it has already been offered for taxation in the A.Y. to whihc the income relates. The only thing the deductee can do is file a revised return to claim the credit of the TDS.

I font think that once the income has been offered for taxation, then again ii cannot be offered for taxation.