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Accounting treatment when TDS is deducted

BINU.M.S (MCOM MBA ICWAI-Inter(Studying)) (197 Points)

10 August 2008

Dear All

First of all I explain my doubt with the help of an example.Say Mr.A is working in a company called A Ltd which is dealing in providing courier services.They provided courier services to B Ltd for Rs.2800.Now when B Ltd account this courier bill they deduct TDS at the rate of 2.060% (58 Rs) and give only 2742 (2800-58) credit to ALtd and they will issue TDS certificates also.Now my question is how A Ltd accounts this TDS.First A Ltd are debiting Rs.2800/- to B Ltd,and B Ltd now only give Rs.2742 only.So through what entry A Ltd account this TDS deduction.I hope u people understand my querry.............Please share your views.

Thanks In Advance

BINUMS

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20 Replies

CA Annie (Chartered Accountant ) (747 Points)
Replied 10 August 2008

cash/bank/Bltd a/c 2742

TDS a/c 58

To Courier service receipts 2800

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SANJAY VERMA (Chartered Accountant) (334 Points)
Replied 10 August 2008

cash/bank a/c...................dr. 2742

TDS a/c .............................dr. 58

To B ltd. 2800

(Guest)

Originally posted by :Annie
"	cash/bank/Bltd a/c 2742 TDS a/c 58 To Courier service receipts 2800	"

Please ensure before entry that the TDS a/c which is debited here is grouped under current assets. That amount will be adjusted with the tax liability of the co.

Purvi (Student) (82 Points)
Replied 11 August 2008

In the books of A Ltd (Courier Company)

1> Entry for Providing Service to B Ltd

B Ltd A/c 2800

To, Courier Service Receipt A/c 2800

2> Entry for receipt of payment from B Ltd

Cash / Bank A/c 2742

Tax Deducted at Source A/c 58

To, B Ltd A/c 2800

Manish Bhandari (C.A) (496 Points)
Replied 11 August 2008

A Ltd can directly pass a single JV

First Entry by A Ltd

B Ltd A/c dr

To Courier Service

second to be passed is the JV

TDS A/c Dr

To B Ltd

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BINU.M.S (MCOM MBA ICWAI-Inter(Studying)) (197 Points)
Replied 11 August 2008

Dear All

Thanks for your valuable replies

Regards

BINU.M.S

balaji (articleship) (47 Points)
Replied 12 August 2008

Hello frnds,

what ;my doubt is after getting TDS certificates from A ltd what entry B ltd will pass or how they reduce TDS ?

William Peter.A (Accounts Officer) (23 Points)
Replied 12 August 2008

I am eager to know about the TDS deduction

dhanunjaya (accountant) (21 Points)
Replied 18 August 2008

i want to know tds entry how to do this entry receiving amount

what is the meaing of on account this sentence showing in tally on out standing

side please explaine me i am dhanunjaya p

(Guest)

My Client is a insurance agent of A private insurance company & the insurance commisson that he receives is only source of his income.For the Fyr 2007-08 ,TDS Has been deducted from his commisson .What is the amont of TDS can he claim as refund & under what Head is insurance commisson displayed in ITR-4.He does not maintain proper books of accounts, DoesThe position change if the gross commisson he recevives is less than Rs 60000.

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(Guest)

kindly let me know the treatment of input credit availed in accounts.

that is we are paying sales tax after deducting the input credit availed during the month. how should it be treated in accounts?

Shubhankar Limaye (B.Com.) (174 Points)
Replied 27 August 2008

To, Suba,

1. For recording Input Credit in respect of sales tax, an current asset account named "Input Sales Tax" should be created. When Purchase entry is recorded the portion of Sales tax on purchases should be debited to "Input Sales Tax" account.

2. Sales Tax Payable on Sales should be recognised as a liability.

3. At the time of payment following treatment should be given
Output Sales Tax Liability A/c Dr.. Full Amount
To Input Sales Tax A/c Setoff Available
To Bank A/c Payment as per challan

(Guest)

Originally posted by :BINUMS
"	Dear All First of all I explain my doubt with the help of an example.Say Mr.A is working in a company called A Ltd which is dealing in providing courier services.They provided courier services to B Ltd for Rs.2800.Now when B Ltd account this courier bill they deduct TDS at the rate of 2.060% (58 Rs) and give only 2742 (2800-58) credit to ALtd and they will issue TDS certificates also.Now my question is how A Ltd accounts this TDS.First A Ltd are debiting Rs.2800/- to B Ltd,and B Ltd now only give Rs.2742 only.So through what entry A Ltd account this TDS deduction.I hope u people understand my querry.............Please share your views. Thanks In Advance BINUMS	"

(Guest)

hi,

i have repaire a car and Contractor gave me a invoice , i was being Charge Separtly for Servicing and seperate for item input in my car. now i want to know as i run a sofrware servicing company. shoul i chare tds on his tolat invoice(32000 for item + 6000 for servicing) or tds only on 4000 or i should not charge tds because it is charging only 4000 as servicing charge.

i am confused. plz tell me what should i do?