Tds

TDS and advance tax paid are adjusted with provision for taxation at the time of finalisation of account.If the aggregate of TDS and advance tax paid exceeds your tax liability then you can claim refund and that is the reason why TDS appears at the current asset side.When you get refund it is adjusted with this TDS.

Ya what u saying is right..,if TDS & Advance tax exceeds tax payable we will get refund,but what's the necessity to show still in the Current year books of records..,and what entry to be passed to nullify such amount, is it right to nullify after claiming against tax payable.........

ya you have to nullify by passing an entry PFT a/c Dr

                                                                            To AT

                                                                            To TDS

Actually if you dont pass this entry TDS will stand in the books and will be c/f .

Well Mugundan and Richa for the purpose of filing Income tax return you are allowed to adjust the TDS deducted and advance tax paid with the tax payable for a particular year. This settlement is allowed by tax authorities for the ease of tax payer.

However, when it comes to accounting of these entries it is not advisable to  set off the advanc tax / TDS with the tax payable. You should carry forward these balances until the assessment for that particular year is completed. On completion you can set off these balances as it is legally settled (Assessment is completed by tax deparment). If you follow this approach then there will be no problem in tracking the TDS and advance tax amounts even if the assessment is done in the later years. 

Hope this will clarify your doubt.

Can u tel Some example......