Tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2018 Dear members,
How TDS payable will be accounted in cash basis accounting of an individual for whom tax audit is applicable?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 December 2018 as a basic rule, in cash accounting, you do not account for payables! as simple as that. As for as tax audit is concerned, your only concern should be that the TDS payable has been duly paid before the relevant due dates.

Querist : Anonymous

Querist : Anonymous (Querist)

04 December 2018 Thank you sir. But in that case what will be the payment entry for TDS?

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 December 2018 you will account for TDS paid same as you do in accrual basis. Just that you would not account for TDS payable.

Querist : Anonymous

Querist : Anonymous (Querist)

04 December 2018 TDS payable entry in Accrual basis will be:
TDS payable A/c Dr
To Bank/Cash A/c
Which account to be debited in cash basis accounting sir?
Do we need to debit respective expense account? because TDS amount cannot be treated as expense
or do we need to proprietors capital account(as TDS receivable is adjusted with the same)?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 December 2018 how do you create TDS payable entry in accrual basis? think about that first.

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