TDS on provision at Yearly closing
This query is : Resolved
23 May 2009
A company made provision for some expense say some contractors bill on 31st Mar 08 or work done by contractor & bill against it is received in June 08
a) Shd TDS be deducted on date of Provisioning i.e 31st Mar & deposited accordingly or at the time of actual receipt of bill?
b) If booked on 31st Mar 08 itself and also deposited, but in June bill is for different amt in such a way that TDS is deposited more by Rs 100000/-. What should Company do now, to get the amt refund?
a) Shd TDS be deducted on date of Provisioning i.e 31st Mar & deposited accordingly or at the time of actual receipt of bill?
b) If booked on 31st Mar 08 itself and also deposited, but in June bill is for different amt in such a way that TDS is deposited more by Rs 100000/-. What should Company do now, to get the amt refund?
24 May 2009
TDS has to be made when payment is made or credit is given to contractors account, which ever is earlier.
scenario 1:
If on 31st March, if you credit a's account by, say 1 lakh, then irrespective of whether you receive a bill or not on 31st march, you have to deduct tax at source.
scenario 2:
On 31st March, you estimate that Rs.1 lakh will be an expense for that year,on account of work completed by certain contractors. You "accrue" those expenditure by making provision in books, without crediting any particular contractor's account. This you have to do because you have to be prudent in accounting so that your PL gives true and fair veiw. In this case TDS cannot be made for want of a "person" to whom credit is given.
scenario 1:
If on 31st March, if you credit a's account by, say 1 lakh, then irrespective of whether you receive a bill or not on 31st march, you have to deduct tax at source.
scenario 2:
On 31st March, you estimate that Rs.1 lakh will be an expense for that year,on account of work completed by certain contractors. You "accrue" those expenditure by making provision in books, without crediting any particular contractor's account. This you have to do because you have to be prudent in accounting so that your PL gives true and fair veiw. In this case TDS cannot be made for want of a "person" to whom credit is given.
25 May 2009
The company is just debitting some exp and crediting Year end provision A/c and not any particular Creditor A/c. What will be the TDS deduction requirement in this case? I think, TDS has to be deducted at time of Exp booking or Payment whichever is earlier and not when credit to Party is given. Pls correct me.
25 May 2009
Your understanding is correct. TDS has to be made when exp booking i.e, when you credit (dr expense, cr vendor/party) or payment either as advance or towards settlement of bills, which ever is earlier.
Scenario 2 of my earlier reply addresses the provisioning query.
Scenario 2 of my earlier reply addresses the provisioning query.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
