TDS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 May 2010 Client deposits tds by debiting tds payable account and crediting auditors account.Before that it(client) transfers tds amount to auditor's account through net banking.Auditor deposits the tds amount.i want to know whether this is corrct procedure or not.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 May 2010 QUESTION IS NOT CLEAR.

Rahul Gupta

Rahul Gupta (Expert)
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10 May 2010 Agreed. Query is not cleared.

What i am getting is that your client transfers TDS amount to the your auditors and then they deposit the TDS amount on behalf of your client.
If this is so, then your accounting entry is wrong. It should be treated as Payment of TDS through Cash/Bank even if it is deposited by your auditors and you reimburse them or so.
But in that case, i suggest you to avoid such thing.

If this is not the case, then please re-ask your query.

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Shyam Lal Naik

Shyam Lal Naik (Expert)
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10 May 2010 In my view, the accounting entries narated by you correctly reflect the transactions.

As per the departmental circular, TDS and for that matter other type of taxes need not necessarily be paid from the net banking account of the deductor/assessee. The payment can be made from net banking account of others as well.