TDS on Previous Year (FY18-19) Invoice has been deducted in Current Year (FY19-20)

TDS 1266 views 2 replies

Veera

Salaried

30 Points Joined March 2008

Dear Experts,

We have received an invoice from vendor dated : March'19 (Previous Year ~ FY18-19) in Current Year (Apr.'19) and we have made entry in our books in Apr.'19 and remitted the TDS to govt. within due date (7th May.'19).

Question is :

The vendor is shown the Invoice in FY 18-19 and it is part of his income, however since the invoice credited / recorded in our books in Apr.'19 and the TDS will be reported in Form-26AS for FY19-20 and there is no TDS deduction reported in FY18-19.

"Under Income Tax Rule 37BA ~ (3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable".

In the given case ~ Is the Vendor is eligible to adjust the TDS in FY18-19 Income Tax return or FY19-20 return.

Please advise.

Thanks & Regards,

Veera

Replies (2)

Kapadia Pravin

17264 Points Joined December 2018

The vendor , though invoice is received in April 2019 but you can always book in Mar 2019 and deduct TDS and provide for TDS liability in the books which you have paid on 7-5-2019 well within the due date.

Why overlapping of invoice ? You are on mercantile accounting .

Do invoice booking accordingly and make simple for your vendor and for yourself too.

Veera

Salaried

30 Points Joined March 2008

Thanks for your inputs.

Just to broader the question from vendor perspective on TDS adjustments (which is deducted by us) :

FY18-19 Income Tax return ~ As TDS is not deducted during the FY18-19 (only deducted in Apr’19 e. FY19-20) and the TDS will reflect in FY19-20 form 26AS, hence the vendor will not be able to adjust the TDS in their return for FY18-19. Correct me if I am wrong.
FY19-20 Income Tax return ~ TDS is deducted during FY19-20 (i.e. Apr.’19) and it is reflecting in form 26AS. However, considering the provisions mentioned in Income Tax Rule 35BA (3) (I) “ TDS Credit shall be given for the assessment year for which such income is assessable". In this case Income for the vendor for queried invoices are included in his Income for previous year FY18-19 and assessed accordingly.

Please advise on the best way forward, which can suggested to our vendors.