Provision Entry

This query is : Resolved

Mohit Goyal (Querist)
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15 December 2010 We used to make the provision entry on 31st march is:

Expense A/c Dr. 100
To Expenses Payable 100

Please advice whether the TDS needs to deducted at the same. If yes what is the logic?

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
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15 December 2010 Mr.Mohit you are right as far as journal entries are concerned but it may also be like
Particular Ex A/C -------Dr
To Outstanding Particular Expanses

As far i think TDS will not be deducted at the time of making provision while it is required to paid at the time of making payment of the expanses .
Thanks

Mohit Goyal

Mohit Goyal (Querist)
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15 December 2010 Hi Shambhu,

Thanks for sharing your views, but as per Income Tax, tax to be deducted at source at the time of making payment or giving credit whichever is earlier. Seems to be TDS will applicable for the same.

Thanks

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HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
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15 December 2010 TDS needs to be deducted at the time of credit or payment whichever is earlier. Since, u have made a provision on 31st March , it amount to credit to payable account and hence TDS is to be deducted on 31st itself and can be paid before 31st may of next financial year.

So, TDS is to be deducted on 31st march when the provision is made.