TaxTMI 
TaxTMI 
A invoice was first accounted and subseuqently cancelled for some reasons & in between TDS paid. Would like to know the Accounting treatment for the TDS paid
TDS paid on cancelled invoice
03 May 2013 
2 Replies 
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TDS on cancelled invoices: not payable if no payment; adjust with customer or claim refund and recognise recoverable asset.
TDS on a cancelled invoice where no payment occurred is not applicable as a tax charge; accounting requires either adjustment with the customer-resulting in a reduced receivable or an advance as the customer claims refund in its income tax return-or the supplier claiming the TDS refund in the relevant return and recognizing the recoverable amount as a current asset until received. (AI Summary)
TDS on a cancelled invoice where no payment occurred is not applicable as a tax charge; accounting requires either adjustment with the customer-resulting in a reduced receivable or an advance as the customer claims refund in its income tax return-or the supplier claiming the TDS refund in the relevant return and recognizing the recoverable amount as a current asset until received. (AI Summary)