i want to know if a person passed entry for salary for the month of dec. on 31th dec. as salary payable and also passed TDS payable for dec. on same date.
but actually he paid salary on 8th of jan.
plz tell me when he is required to deposit the TDS. what is the due date ? considering sec.192 (TDS deduction on actual payment basis)
25 January 2014
He should must to deduct the TDS either at the time of actual payment or make provisions whichever is earlier. So as per this rule you have to deduct the tds at the time of making provision in your case. and deposit same to be in 7th day of upcoming month for apr to feb. for march it is 30th April.
20 July 2024
In the scenario described, where salary for the month of December was accounted for on 31st December as "salary payable" and TDS payable was also accounted for on the same date, but the actual payment of salary occurred on 8th January, here’s how the TDS deposit should be handled:
1. **TDS Deduction Basis - Section 192**: Section 192 of the Income Tax Act pertains to TDS on salary payments. It mandates that TDS should be deducted at the time of actual payment of salary to the employee, not at the time of accrual or provision.
2. **Due Date for TDS Deposit**: Since TDS on salary should be deducted at the time of payment (actual disbursement to the employee), the due date for depositing this TDS with the government is based on when the salary is actually paid.
3. **Practical Application**: - **Actual Payment Date**: The salary for December was paid on 8th January. - **TDS Deposit Due Date**: The TDS deducted on this salary should be deposited with the government by the 7th of February (for the month of January), considering the usual timeline of TDS deposit which is within 7 days from the end of the month in which TDS is deducted (except for March, where it's 30th April).
4. **Impact on Accounting Entries**: - The entry made on 31st December for "TDS payable" should ideally be reversed because TDS should not have been accounted for until the salary was actually paid and TDS was deducted at that time.
5. **Correct Procedure**: - Reverse the TDS payable entry made on 31st December when the salary was accounted as payable. - Make a fresh TDS deduction entry on 8th January when the salary was actually paid. - Deposit the TDS deducted (as per the rates applicable) by the due date, which is typically the 7th of the following month (in this case, 7th February).
In summary, TDS on salary should be deducted at the time of actual payment of salary, not at the time of provision or accrual. Therefore, the TDS should be deposited with the government based on the actual payment date (8th January in this case) and within the due dates specified by the Income Tax Act.
CAclubindia
