Royalty income consider in which f.y.?

TDS 535 views 6 replies

Pankaj Arora

Learner

3134 Points Joined September 2009

Dear All

I have a publishing co. we have deducted tds on royalty income let's say on income of rs. 1 lac we have deducted 10,000 as tds ( f.y. 2011-12)

I want to know how will author claim this in their ITR because we will be able to give them form 16 after 15th may and author have already deposited their advanced tax on 15th march.

my doubt on above queries are -

1. if author claim this income in f.y. 11-12 than he has to pay interest on income because he comes in 30 % tax bracket. If he pays self assesment tax before 31st july will he have to pay interest on it also?

2. can we claim this income in f.y. 12-13 on form 16 basis? Will form 16(f.y.11-12) valid for next financial year

Replies (6)

CA Sripal Jain

Associate Finance

709 Points Joined January 2009

hey first of all the answer is no ,you cannot claim royalty income next year on basis of form 16,form 16 is just a certificate for TDS,it is no way ocncerned with showing income next year or this year,so u must disclose royalty income in FY2011-12 and basis of form 16 he can claim it before 31st july while filing ITR,he can claim tht TDS rite,i dunno why wil he pay interest,so please be clear on this part,rest is okk.therefore its advisable u must disclose it in current year

Pankaj Arora

Learner

3134 Points Joined September 2009

thanks for reply author has already paid advance tax on their income on 15th march but we will give

hime royalty amount in june and we informed author on 5th of may their royalty amount.

we have deducted 10 % tds on royalty but author is in 30 % tax bracket now if he claims royalty

income in f.y. 11-12 he have to pay rest 20 % tax so I am asking that if author deposit this 20 % tax

before 31st july. Will have have to pay any interest on those 20 % tax?

CA Sripal Jain

Associate Finance

709 Points Joined January 2009

case1: say if you have decutd TDS in month of march (thts wht im assuming frm your question as form 16 is issued for fy 2011-12) then author is liable for advance tax under section 234

case2: if you havent deducted tds in march ,then income relates to next year and accordingly ITR must be filed for subsequent year

i have a question to ask ,when did u pay him rolyalty ,if you paid him in june then its the next year income and accordingly no interest ,so please let me know when did u deduct tax,if you paid him in june how can u give form 16 for last year

regards

sripal jain

Pankaj Arora

Learner

3134 Points Joined September 2009

we deducted tds in march and book royalty in march itself as royalty payable and we will paid this royalty amt in june.

CA Sripal Jain

Associate Finance

709 Points Joined January 2009

then he is liable for advance tax interest and for interest on TDS also ur liable as you have made late remittance of TDS,the due date is 30th april ,therefore your liable for interest but payment will not be disallowed

regards

sripal jain

CA Sripal Jain

Associate Finance

709 Points Joined January 2009

To be fair its an hardship to assessee,as he comes to know about his income later,as he receives income next year rite,so he can escape interest on advance tax ,lets wait for others opinion

regards

sripal jain