27 December 2014
I have a situation. the company has outsourced the work to BPO company. on behalf of client we had deducted income tax from the vendor who does business with our client. please assist the journal entry.
28 December 2014
In your case a Company has outsourced some works of their clients to outsiders. Then Entry will be. At the time Income Accrue Client A/c Dr to professional receipt To Service tax
At the time of receipt from the clients Bank Dr. To client
At the time TDS certificates received from clients TDS receivable Dr. To Client
At the time of expense booking, for outsider Expenses A/c Dr. Service Tax Dr (If any and eligible for cenvat credit) To Vendor A/c To Tds payable. (excluding Service tax)
At the time of making payment Vendor a/c Dr To bank
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