I received a benefit from a Company on which TDS was deducted under 194R. The TDS deducted is reflecting in 26AS. I want to know
1) accounting entry for the benefit received.
2) accounting entry for the TDS deducted.
anonymous (proprietor) (244 Points)
16 February 2023I received a benefit from a Company on which TDS was deducted under 194R. The TDS deducted is reflecting in 26AS. I want to know
1) accounting entry for the benefit received.
2) accounting entry for the TDS deducted.
Yasaswi Gomes new
(Finance )
(4492 Points)
Replied 16 February 2023
All the deducted TDS gives you tax credits and reduces your tax liability.
So, for example, if you end up paying 30% TDS on a lottery payment of Rs. 300,000 (i.e. you received only Rs. 210,000), and this is your only income in the financial year, when you file your ITR your total tax liability would be zero (Rs. 250,000 being the minimum exempt income). Thus, the excess tax you ended up paying as TDS would be returned to you.
Dr. Bank 40000
Cr. Retained earnings 40000
I think this is what it will be like as per accounting perspective.
CA Rashmi Gandhi
(Chartered Accountant)
(86308 Points)
Replied 17 February 2023
anonymous
(proprietor)
(244 Points)
Replied 17 February 2023
No amount is received in Bank or otherwise. I received a benefit in the form of a business conference trip on which TDS was deducted under 194R.
Now can you suggest the accounting entry for the benefit received and the TDS deducted.
CA Rashmi Gandhi
(Chartered Accountant)
(86308 Points)
Replied 18 February 2023
anonymous
(proprietor)
(244 Points)
Replied 18 February 2023
Hello Rashmi
Thank you for your prompt reply. Regarding your above reply, I have a follow up query. How will we square off the XYZ (Co. paying benefit) account in books since no amount is received by us.
Yasaswi Gomes new
(Finance )
(4492 Points)
Replied 18 February 2023
When no amount is received for 100 rs lottery win and 10 tds and 5 reimbursement
Dr. Receivables 95
Dr. Tds 5
Cr lottery amount 95
Cr. Reimbursement 5
Yasaswi Gomes new
(Finance )
(4492 Points)
Replied 18 February 2023
Forgot your not a lottery winner. Alright!
Dr. Receivable company (reimbursement)
Cr. Reimbursement amount
Now in the company accounts
Dr. Conference tour expense
Cr. Bank
A benefit is given to you by a client on what amount? Supposing it's like a bonus and tds is applicable on it and added to IT. Before that if you fall under zero bracket, 2,50,000 income by you, you'll not get any reimbursement. But if your like 1 lakh gross pay you'll get the whole benefit reimbursed till 1,50,000 (if this is your benefit cost). What is your pay scale?
Ash A
(Tax Consultant )
(22 Points)
Replied 19 August 2023
In case the Company paid the TDS from their own pocket:
Capital A/c Dr.
TDS receivable A/c Dr.
To income under section 194R
In case the Company collected the necessary cash required towards TDS from you:
Capital A/c Dr.
To income under section 194R
TDS Receivable A/c Dr.
To Bank A/c
(TDS Receivable A/c can be squared off against tax payable a/c)
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