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Help for tds entry

surender (Manager Accounts) (149 Points)

28 July 2011

we got a bill Rs. 5000 for medical expenses of employee. out of Rs. 4000 is we have to debit in the acount of our labour suplier (contractor0 and rest Amount 1000 for our employee expenses.wht will be the entry with TDS Amount?

Medical expenses....Dr.1000
Contractor.....Dr. 4000
To Creditor (Hospital)4900
To TDS on Profesional 100
Is this is right posting help me out

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4 Replies

CMA Shilpa Shinde (COST ACCOUNTANT) (217 Points)
Replied 29 July 2011

Dear Surender, Kindly make clear the contract terms for Medical Expenses to be born by whom i.e., by company or Labour Contractor. Labour Contractor provide services arranging labours/ workers at work site. As per contract if the medical expenses explicitly borned by company contract labour a/c will not come into picture. In such case if paid on behalf of Labour contractor following entries can be accounted :- 1) Medical Expenses a/c dr 5000 to Hospical a/c cr 5000 2) Labour Contractor A.c dr. 4000 to Medical Expenses a/c 4000 in second entry labour contract a/c in your books will be debited and adjusted against any dues payable to lab. contractor.

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surender (Manager Accounts) (149 Points)
Replied 30 July 2011

Shilpa Thanks and reagrds for helpful suggession. we had contatct with hospital for medical expenses.Medical expenses of contract labour born by the contractor labour provider. But hospital billing to us such expenses (contract labour medical treatment) so we have to pay the whole amount and we deduct such part of amout from the labour contractor. Now confusion here arises how much we have to deduct the TDS on the payment to hospital. only for our medical expenses or both contractor + our ? Rs.1000 for our employee exp and 4000 for contractor exp. total bill amount Rs.5000.

CMA Shilpa Shinde (COST ACCOUNTANT) (217 Points)
Replied 30 July 2011

Dear Surender,

If the contract with Hospital is only for medical expenses/services of your company employees then, related expenses /service bill should be raised by Hospital separately for Company and for Contract Labour Provider.

Company can ask Hospital to bill separately. and TDS applicable only on service provided for company employees.

Rest payment made by company on behalf of cntr. lab.to be debited to C.l.provider a/c. for adjusted against his a/c..

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