08 February 2014
1) payment made to contractor did not exceed rs. 30,000 or rs. 75,000 for the first few moths of the year.
2) in the month of september, the total payments exceeded rs. 75,000.
3) kindly suggest when tds entries are to be passed i.e on the date when the earlier payments were booked or one combined entry when the limit was exceeded in september.
08 February 2014
TDS is required to be deducted on the entire balance i.e. previous transaction + sept transaction. entry : Exp. a/c Dr To Party A/c To TDS Payable A/c Consider extended example. TDS rate is 10% Up to sept. 70K and on 17/09 trans of Rs. 25K then entry will be (1) Exp a/c Dr 25k To Party a/c (2) Party a/c Dr 9.5k To TDS a/c
09 February 2014
so the above entry will be passed in september, am i right? also is this treatment stated in the income tax act? if so, then please advise regarding the relevant sections. thanks in advance
10 February 2014
yes, here combined reading of principle, a/c paid or a/c credited whichever is earlier and limit of respective TDS section is required to be understand.You will not find any accounting treatment in the entire income tax law, you have to suggest to your client by understanding the provisions. okay...
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