How to Book a Expenses for Advance payment for AMC

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ravinder singh rawat (Querist)
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29 April 2009 Dear Experts,

Our company has given half money as an advance for AMC for Out DG sets. Total Cost AMC cost is 65000/- . Half money we will give after 6 months.

Now my question is when we will book this expense at time of giving advance or at the time of AMC of DG sets and will give a receipt of AMC done.

At the time of giving advance AMC service provider providing an acknowledgment receipt which is for advance payment making to him.

Please Guide me.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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29 April 2009 ask for AMC Bill from Party & Booked through AMC Bill.TDs also applicable on advance payment.

Kaustuv

Kaustuv (Expert)
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30 April 2009 Please also tell us the timeline.i.e, when you have made the payment and when is your book closure.. the proper accounting treatment would depend on this

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CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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30 April 2009 The day Annual Maintenance Contract is signed the entries should be passed. The expenses pertaining to the next year may be booked as Prepaid Expenses. TDS u/s 194C or 194J may have to be deducted which may be deposited as per the Income Tax Rules.
In case of AMC for genset the tax will have to be deducted u/s 194C only. The entry may be passed as per under:

Generator Expenses Dr.
Prepaid Expenses Dr.
To Contractor's A,c

Contractor's A/c Dr.
To TDS Payable

ravinder singh rawat

ravinder singh rawat (Querist)
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30 April 2009 Thank you very Much.