Tds deduction

This query is : Resolved

nijam (Querist)
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02 September 2013 Sir,

I want to know if our company provided a taxable service of some amount and passed sales bill in our books .

later the party is paying the amount in full & final after deducting tds.

so what entry will be done in our books to adjust the full amount

Hemant Kumar

Hemant Kumar (Expert)
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02 September 2013 Entries is as :

1) Sales:

Party Ac. Dr.
To Sales Ac.

2) Payment Received (amount after TDS)
Bank Ac. Dr.
To Party Ac.

3) TDS
TDS receivable Ac. Dr
to Party Ac.
Collect the TDS Certificate from party. Claim this amount in IT Return. if you will get refund then pass the following entry.

4) TDS Receivable
Bank Ac. Dr.
To TDS Receivable Ac.

Suppose liablity of IT raised on you then this amount will not refund. in this case you can adjust this amount in Income Tax and pass the following entry at number three.

TDS expenses Ac. Dr.
TO Party Ac.