Notice period recovery accounting

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ISHAAN VARSHNEY (Querist)
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01 January 2016 if there is a notice period recovery, then how should an employer has to account that taking Tds in mind also

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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01 January 2016 Notice period recovery can be accounted in 2 ways

1. Reduce from Salary expenses ( Employee cost ) Dr: Employee & Cr: Salary

or
2. Book as other income Dr: Employee & Cr:: Other income

TDS will be applicable in the hand of employee when book the salary and recovery part is different

ISHAAN VARSHNEY

ISHAAN VARSHNEY (Querist)
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02 January 2016 thanks Ramesh. but should we deduct the amount of recovery for the purpose of calculations of TDS

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 January 2016 while showing income (salary) to employee you need to show the TDS payable. after that you can pass the recovery entry