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Tds accounting treatment

CA Tanay Jindal (CA in practice ) (163 Points)

04 January 2013

I have a confusion in accounting treatment of FD,so plz guide me.
problem is
Eg. F.D=200000
Interest at end of the year=20000
TDS=2000

Then what will be the exact accounting treatment
1=in p&l = 20000 or 18000
2=in b/s = 200000+(20000 or 18000 )
if 18000 then where to show TDS amount of rs 2000

And

if i file my return to take credit of 2000 then how TDS appear in Books of accounts
like if it shown as current assets the why it is shown as current assets coz we have already taken the credit .

plz guide me
thank you in advance

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7 Replies

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 05 January 2013

On Accrual of Interest pass following entries in the books

TDS A/c..........................Dr. 2,000 (B/S)

Accrued Intt of FDR........Dr. 18,000 (B/S)

To Interest on FDR 20,000 (P&L)

For Provision of Taxation pass the following entires:

Provision for Taxation....Dr

To Income Tax Payable

For Adjustment of TDS Pass the following entries:

Income Tax Payable........Dr. 2,000

To TDS A/c 2,000

Alternatively, if it is not an company, You may also transfer the TDS to Capital A/c of Prop/Partners.

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Pradip Shaw & Co (Practice) (227 Points)
Replied 05 January 2013

On Accrual of Interest pass following entries in the books

TDS A/c..........................Dr. 2,000 (B/S)

Fixed Deposit ........Dr. 18,000 (B/S)

To Interest on FDR 20,000 (P&L)

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 05 January 2013

Fixed Deposit Account may not be debited utill it get renew. Therefore, till that time we will have to keep the same in any other account, whatsoever the name of that account may be.