Availability of TDS credit

[madhavvan n]

x co is a contractor undertaking contract jobs. For FY 08-09 it has received a sum of Rs. 5 crores and TDS deducted is Rs. 10.20 lacs can it accrue income of Rs. 4 crores since only Rs. 4 crores work is completed. In this case will the TDS credit of Rs. 10.20 lacs be available, or it has to accrue the entire Rs. 5 crores as income to claim the TDS of Rs. 10.20 lacs. ( this will be contrary to accounting standards as only work completed can be accrued as income)

AI Summary

Contractor to Recognize Rs. 4 Crores as Income, Claim TDS Proportionately; Balance TDS Next Year per Accounting Standards. A contractor company received Rs. 5 crores for FY 08-09, with Rs. 10.20 lacs TDS deducted. Since only Rs. 4 crores worth of work was completed, the query was whether to accrue Rs. 4 crores as income and claim TDS proportionately. The response advised recognizing Rs. 4 crores as income per accounting standards and claiming TDS proportionately. The remaining TDS can be claimed in the following year when the remaining Rs. 1 crore is recognized. The current tax return format allows for specifying the claimed TDS credit amount.