Dear all,
An assessee (professional) is maintaining books on cash basis and has billed professional fees of Rs. 3 lacs as on 31.3.2013
He receives only Rs. 1 lac till 31.3.2013 net off tds ie. Rs. 90,000
However, his client has provided the entire Rs. 3 lacs in its books and deducted tax Rs. 30000 as on 31.3.2013
Now how to show the effect of Rs. 20000 in order to match Form 26AS
Ideally as per law, the professional has to claim Rs. 1 lac and corresponding tax in 2013-14 and defer the balance in the next year of receipt. This will not match Form 26AS and would create practical difficulties for the assessee.
Please guide us how to go ahead. i have given two possibilities hereunder. Please let me know which is tenable.
1. Show income on accrual basis and claim Rs. 3 lacs as income and entire TDS to match Form 26AS
2. Show income as Rs. 120000 (90000+30000) and claim tds as Rs. 30000 to match Form 26As
In this case, the logic is Rs. 90000 is cash receipt and Rs. 30000 is tax paid to govt on behalf of assessee therefore this is also cash receipt (sort of). Is this correct ?
Regards
CAclubindia
