How to tackle TDS on Advance Payments u/s 194C, Sec. 194I or Sec. 194J ?


The rule of deduction of TDS on advance payments of rent or contracts or even u/s  TDS  is a problematic part for the deductee. The advance is not an income, so  a deductee can not show it as income and the claim of TDS will not be entertained, if income is not shown. Then, next year when advance becomes income, the problem comes in the form of claim because 26AS statement will show the assessment year different from the year in which advance is  treated as income. Thus, while processing the income tax return will not give any credit  for that TDS on the ground that the assessment year is different.

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