TDS on provision of expenses

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Manish (Querist)
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06 May 2009 Is TDS applicable on provision made for expenses? If yes, then how would we treat the bill at the time of posting?

taxindiaconnect

taxindiaconnect (Expert)
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06 May 2009 The TDS is applicable is the expenditure falls in any of trhe category mentioend in chapter XVII of IT Acrt. In that case the follwing accounting enrty would be passed in the books

Expendiure Account Dr
To provision for expenditure A/c
To TDS payable account.

At the time of payment the entries would be as following -

Provision for Exp a/c Dr.
To Vendor A/c

Vendor A/c Dr
To bank

For payment of TDS on due date the entry would be

TDS Payable Dr.
To bank.

Hope this clarifies your query.

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