how to do accounting entries for tds deducted under 194k???
please, elaborate with practical example..
The person paying dividends on mutual funds should deduct TDS u/s 194K. The deduction is at 10% on the number of dividends, only if a resident shareholder’s total dividend in a financial year exceeds INR 5,000. Section 194K is applicable from 1st April 2020 i.e. FY 2020-21 onwards. If dividends are payable at 6,000 to a person
Retained earning a/c 6000
To Dividends payable a/c 5400
To TDS Payable a/c 600
This will reduce retained earning and accrued TDS payable to tax authorities. When payments are met
By Dividend Payable a/c 5400
By TDS Payable a/c 600
To Banks a/c 6000
This ways retained earnings 6000 and Bank 6000 balance reduces.
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