01 September 2013
I MADE A PAYMENT OF Rs. 20000/- by way of Cash TO AN AGENT towards Commission without deducting TDS.The entry is :
Commission A/c .... Dr. Rs. 20000/-
to Cash A/c Rs. 20000/-
Since commission payments attract TDS u/S 194 H of Income Tax Act , I enhanced the payment amount by Rs.2222/- (being TDS PORTION) by way of Journal Voucher entry as shown below.
Commission A/c .... Dr. Rs. 2222/-
to TDS Payable A/c Rs. 2222/-
So the total amount paid towards Commission is Rs. 22222/- (including TDS of Rs.2222/-) which is debited to P & L A/c.
Now my query is :
Whether the total payment of Rs. 22222/- will be disallowed under Section 40 A (3) OR NOT ? (Being payments made in cash in excess of Rs. 20000/-)
CAclubindia
