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Tds

Mugundan (Live your Passion) (249 Points)

08 October 2011

Hi I'm Mukund,

I'm having doubt regarding TDS..Every year we are claiming TDS against the Tax payable.

Say for example :

A.Y TDS Amount Advance Tax Paid

2009-10 120000 90000

2010-11 125000 80000

2011-12 140000 110000

Eventhough after claimed against TAX payable in the A.Y.2009-10 & 2010-11, what's the need to show it in the Current Year books of records in Balance Sheet i.e.( A.Y.2011-12 )..,or Is it right to show...

If it's right, Why it's right.....?

If it's wong to show it in the current year books of records, tel me the reason and how to rectify it..?

Plz....Can anyone help me for my query ?

regards,

Mukund

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5 Replies

CA RICHA BADALIA (CA,CS) (1682 Points)
Replied 08 October 2011

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.

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Mugundan (Live your Passion) (249 Points)
Replied 08 October 2011

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.........

CA RICHA BADALIA (CA,CS) (1682 Points)
Replied 08 October 2011

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 .

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CA Sachin Rastogi (Audit/IFRS Manager) (338 Points)
Replied 11 October 2011

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.

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