Tds entry

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2011 We have raised a bill on our party for Rs.100000. The party has made a payment of Rs.99000 after deducting 2% tax on that ie. Rs.1980 TDS. But they have issued us a TDS certificate of Rs.2000. How do we reconcile the tds account.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 August 2011 Show TDS deducted as Rs 2000 and make the adjustment of balance amount by way of cash entry.

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2011 No convinced. Pls give the necessary journal entry

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 August 2011 You are saying the party made payment of Rs 99000/- after deducting TDS Rs 1980/- which is wrong. It will be Rs 98020/-. Now they issued TDS Cert of Rs 2000/-.
Pass entry like this--

Party A/c Dr ...100000
To Bill A/c (Income Receivable) Rs100000

TDS Receivable A/c Dr....Rs 2000
To Party A/c Rs 2000

Bank A/c Dr...Rs 98020
To Party A/c Rs 98020

Therefor you received Rs 20 more.

Party A/c Dr.....Rs 20
To Cash A/c Rs 20

(being excess payment received now adjusted by cash payment.)

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2011 No there is a balance lying in the party account for Rs.1000. Then what entry will be passed.