|QUERY:||A tax consultant is maintaining accounts on cash basis.
During the F.Y. 2016-17 amount has been given on loan @ 15% p.a. interest. On March 31, 2017, the borrower deducted TDS @ 10% on interest income accrued and paid to Department which has been claimed by lender in his I.T. Return for Assessment Year 2017-18 but did not show interest income because books are maintained on cash basis.
Hence, the querist wishes to know –
1) Whether the Department can tax the interest income accrued and not received as TDS claimed.
2) Whether the Department can refuse to grant credit of TDS certificate as income accrued thereof is not shown taxable.
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||Deduction at source - Tax deducted is income received -Claim of TDS on interest income|
Thus section 198 is an enabling provision treating the tax that is deducted at source as the income of the payee. This stands to reason because the assessee would get credit for the same from the Assessing Officer on his filing the return.