TDS on making provisions

This query is : Resolved

Guest

Guest (Querist)

10 June 2008 On closing the books at at 31 st of march we are doing some provision for expenses payable.

Accounting entry will be :

Expenses A/c Dr.
To Expenses Payable A/c

Shall we deduct TDS on this provision, as we are neither credit nor paid to party.

Kindly advice

Thanks

Regards

Rajesh

shailesh prajapati

shailesh prajapati (Expert)
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10 June 2008 You shall definately have to deduct the TDS.
The entry will be:
Expense a/c Dr.
To Party/Payable (Net) Cr
To TDS Cr

If not having of credit you had not deducted TDS then expenses are not allowed u/s 40(a)(ia)

Shyam Lal Naik

Shyam Lal Naik (Expert)
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10 June 2008 Crediting to the party's a/c is not essential for tds deduction. Even crediting to suspense a/c will require deduction of TDS.

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