Suppose u hv to deduct tax on transportation charges of Rs.20,000/- @ 2.266%
Entries: 1) Transportation charges dr. 20,000 To Party a/c(20,000-2.266%) 19547 To TDs Payable 453 (20,000*2.266%) 2) Party a/c dr. 19,547 TDS Payable dr. 453 To Bank a/c 20,000
Now suppose u r providing transporation service. U earn 20,000 as transportation charges on which 2.266% tax is deducted by the party.
Entries:
1) Party a/c dr. 19,547 TDS Receivable dr. 453 To Transportation charges 20,000
2) Bank a/c dr. 19,547 To Party a/c 19,547
*** TDS receivable a/c is shown under the head "loans & advances" at asset side in b/s.
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