Provision for Expenses

This query is : Resolved 

04 May 2008 Sir,

I have receive the Professional bill for the month of March in April Dated April what entry should be passed in the books of accounts and Also i want to know when should i deduct the tds in the month of march or in the month of april 08


05 May 2008 if you are received bill in april then you will pass jv on 31/03/2008 & you will pay tds before 31/05/2008 so it will allowed in the f y year 2007-08
if you want to paid in the year 2008-09 then you will pay tds before 07/05/2008

05 May 2008 TDS should be deducted on accural basis even though its a provision.

There is another altenative where -in you accumilate the TDS amount and at the year ended pay full TDS amount along with interest.

However, the first method makes more sense.

Entry:-

Vendor a/c Dr...
To TDS payable a/c.



05 May 2008 31/03
Dr. Expense
Cr. TDS Amount
Cr. Outstanding Liabity

Before 31st May

TDS Dr.
Cr. Bank A/c.

when payment to party

Outstanding Liability Dr/

Cr. Bank

05 May 2008 Entry is
Expense Dr
TDS Dr
O/s Liability Cr

The above entry would be passed in the month of March

05 May 2008 I AGREE WITH C.A SRI HEMANT DEWANI.
R.V.RAO



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