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Tax calculation when check is realized after march 31st

Tax queries 188 views 3 replies

Rajesh

consultant

23 Points Posted on 19 April 2018

I am a freelancer and I do software consulting for an overseas client . I get payment as check and so by the time the check is realized in my account it takes about 2 months from the time the invoice was raised. So for month of February, the check date is 28 Feb, Check deposit date is 28 Feb, but check realization date (the date on which money is credited to my account) is in April which is the next FY. So for which year this income is to be reported?

Similarly for march the check date is 28th March, Check deposit date is 10th April, Check realization date will be in May.

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211715 Points Posted on 19 April 2018

Consider the date of cheque as your receipt date for taxability.

The amount will get debited to 'bank realization' till actually credited to your bank acc.

Rajesh

consultant

23 Points Posted on 23 April 2018

Thanks for you reply sir. But is it by rule to consider the cheque date or do I have an option of considering the cheque realization date as the receipt date. The reason I ask this is, I don't have any proof of the cheque date as after the cheque is deposited, the bank statement doesn't reflect it. But on the other hand for the realization date the proof is in the bank statement.