timming difference of income accrued and deduction tax at source by payer

[Rakesh Bansal]

Sir,

One of my client received some income on which the payer has not deducted any tax in the year of payment. My client filed his ITR declaring the income and no claim for TDS was made. In the succeeding year, the payer booked the payment made last year as current expenses and deducted tax at source. Now there is timing difference between the income accrued and the year of deduction i.e. income vis a vis form 26AS. My query is how to treat the income in succeeding year to tally it with 26AS when the income has already been considered on mercantile basis in preceding year?

[Shilpi Jain]

GST would be liable as per the provisions of time of supply. If that is complied with then any other reason for differences with books can be given as a reconciling difference in Form GSTR-9C. Further comparison with 26AS is not required for Form GSTR-9C.

[Rakesh Bansal]

Thanks for the reply. however my question pertained to Income Tax and not GST.Regards

AI Summary

Timing difference between income recognition and tax withholding creates Form 26AS mismatch requiring income tax reconciliation. A taxpayer recognised income on the mercantile basis in the prior year though no TDS was deducted then; the payer deducted TDS in the succeeding year, creating a timing difference between income recognition and withholding as reflected in Form 26AS, raising the question how to treat the receipt in the succeeding year for income tax reporting and reconciliation with Form 26AS.