TDS on Credit Note ISSUED

Did he not issue the certificate? What is the procedure if the buyer doesnt give seller TDS certificate? You must have followed that procedure if one exists

Certificate is already issued by the buyer and also reflected in 26AS while filing the ITR, but the amount of TDS is excess as the credit note issued in later month doesn't adjusted against the same. Now , AO says that as the TDS on credit note value is not adjusted and they will not consider it as excess TDS deducted (due to credit not) and does not allow to supplier.

Give me a second I read that just now

TDS effect in Debit note [Resolved] | Accounts (caclubindia.com)

There is no TDS reversal mechanism in Indian tax law for credit notes. Here is how it actually works.

When a credit note is issued after TDS has been deducted:
The TDS you deducted on the original invoice is final. You cannot reverse the TDS already deposited with the government. The supplier will account for the reduced income in their own return and the TDS credit in Form 26AS will offset their total tax liability. They may even get a refund if the net tax payable after the credit note adjustment is lower than TDS already credited.

Your options for future transactions:
If you adjust the credit note against a future invoice from the same supplier, deduct TDS on the net invoice amount (new invoice minus credit note). For example: new invoice Rs 3 lakh, credit note Rs 1 lakh, TDS is deducted on Rs 2 lakh.

What NOT to do:
- Do not file a TDS correction statement reversing the original TDS, that creates a deductee ledger mismatch
- Do not deduct TDS on the full new invoice if the credit note is being settled simultaneously

One exception: If the original invoice was never paid and you are cancelling it entirely via credit note before depositing TDS, you can avoid depositing TDS on the cancelled portion (since the credit event never materially occurred).

For the full TDS rate chart including Sections 194J, 194C, and 194H, and how credit adjustments interact with each, this [TDS on partner payments and firm obligations guide](https://taxgarden.in/blog/section-194t-tds-partner-payments-firm-llp-india) covers the mechanics of TDS deduction events and timelines.