10 October 2012
What is correct entry of TDS REFUND? One of our clients paid us for our services without deducting TDS..so after a month he submitted FORM 16A on that basis I arranged payment. And passed this entry. TDS RECEIVABLE A/C.......Dr. To bank A/c. But when I saw previous entries by different accountant TDS RECEIVABLE A/C..........Dr To BILLS PAYABLE A/C. And then BILLS PAYABLE A/C......dr To bank. My question is hich is correct entry and the other entry routed through BILLS PAYABLE
10 October 2012
For your case your entry i.e TDS receivable a/c dr To Bank a/c is correct Because of you paid your funds to TDS to the deductor so it is correct.
And TDS receivable a/c dr To bills payable a/c uses at the time of TDS deducted in the bill payment to use. But in your case first bill paid with out deduction of TDS it is the risk of the deductor but after that by his request you paid such TDS amount returned. So your first entry is correct.
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