Hi
There is a XYZ Pvt Ltd Co.and on January 10, 2011 It has been entered into an agreement with professionals from back date i.e October 15, 2010 as recieveing services from professional from this date.
The consultant or professional has raised all the invoices on January 15, 2011 for the services provided from the begning i.e Oct 15, 2010. Now my question is what will be the tax complication in such a case if we book the expenses at present date.
1) TDS
2) Service Tax
If agreement is sign in back date i.e. 15-10.10 or raises invoice on 15.01.11 than you have to deduct tds at the of payment or at the time of credit whichever is earlier. Tds have to be deducted on gross amount including service tax.
Simply consider the Date of Payment or Date of Accounting/Date of Invoice whichever is earlier.
Hema Yashwanth & Associates
Chennai
B.Com
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Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
CA Foundation
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CCI
Pro
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