13 December 2010
HI, My question is that, a firm purchase a raw material from the purchaser & there is a condition in the Purchaser invoice that if the payment is made after 15 days then he will charge interest @15p.a. and our firm normally made a payment after 15 days, which attracts the interest liability according to the credit period availed by our firm. But in our books we didnt pass any entry regarding Interest due & didnt pay any interest.According to the calculations, there is a interest liability payable approximate to Rs400000 from April 2010 to Nov 2010. As per the reply of Accountant, they pass the entry of interest due at the end of the year & deduct TDS thereon.
Now my question is when TDS liability should attract..at the time of payment of Purchase Bill or at the end of the year when payment stands credited.
CAclubindia
