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TDS credot

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VILAS

Chartered Accountants

21 Points Posted on 03 August 2009

In case of professional persons TDS is deducted by the client on accrual basis of the fees payable to the professionals. Payment is received by professionals after the end of accounting year. In such cases there is mismatch TDS certificate is say for FY -08-09 Income recevied by professional person in FY 09-10. Professionals are following cash system of accounting.

In such cases TDS element is deemed to be recieved in the year of deduction.

How the professional perso should treat such TDS element? When he should take credit of the same?

Whether in the year of deduction say FY 08-09 or in FY 09-10 when the income is accounted on receipt basis by professional.

Replies (1)

Vibhash Kumar Sah

63 Points Posted on 03 August 2009

Hi,

This is the common problem. It is always advisable to take the credit of TDS in the year in which it is deducted. Now , as filing of TDS return is done online and credit of TDS is not based on what certificates U attached with ur I.T Return. Normally, as and when TDS return is filed by the deductor, the deductee get the credit of tax to his account. So one has to take benefit of TDS in the year in which it has been deducted.

For accounting , at the year end,Debit TDS Receivable Account with the amount of TDS and credit ur Client/Customer account. This entry may be reverved on the 1st day of next year. This is generally followed by professional following cash basis of accounting.