Provision for Expenses

This query is : Resolved

Ravi Kiran (Querist)
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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

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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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

Amit Sharma

Amit Sharma (Expert)
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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.

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CA. Kirti S. Ganatra

CA. Kirti S. Ganatra (Expert)
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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