TDS deduction

This query is : Resolved

G.E.Sudarsan

G.E.Sudarsan (Querist)
Follow

06 March 2009 the queries about the deductor partially bare of tds deducted amount. for example, commission paid to deductee Rs.1,000/- i am deducted 10.3% rs.103/-, out of this amount rs.100/- only to bare by deductee and the balance of rs.3/- bare by deductor.is it possible under the income tax act. suppose it is poosible rs.3/- which head it should booked? kindly clarify the queries.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
Follow

06 March 2009 The whole amount of Rs. 103 will be beared by deductee. This is cess and will be treated as tax for assessee.

You will give him TDS certificate including cess.

G.E.Sudarsan

G.E.Sudarsan (Querist)
Follow

09 March 2009 Thanks sir, TDS certificate is given to deductee for Rs.103/-, but my query is Rs.3/-bared by deductor, for the reason of rounds up. is this situation the entry is made as
Commission a/c dr 1000
TDS payable cr 103
Vijay(Dedcutee)CR 900
Bank charges dr 3

TDS certificate is given by deductor for rs.103/-
but rs.3/- is bared by dedctor and the same is treated as expenses. is it correct. kindly clarify the qurries very soon.

Upgrade to CAclubindia Pro. Subscribe Now!