I received a Invoice Dated :- 18.05.20
of AMC contract period is from Feb-20 to Jul-20
So i have to make provision in FY 2019-20 proportionately but in this whether to be deducted in the m/o Mar-20 or in May-20
If to be deducted whether Proportionately or in full
kindly guide
6 Replies
jashwanth
(CA-PRACTICE)
(400 Points)
Replied 24 May 2020
First allocate the amount proportionately, then determine Tds applicability based on the amount.
Vipul Acharya
(Account Officer)
(647 Points)
Replied 25 May 2020
But my CA advised to book TDS in the m/o march -20 with full amount
Pradeep Gupta
(Accounts Manager)
(298 Points)
Replied 25 May 2020
You need to deduct TDS on full amount excluding tax.
Further, Expenses will be booked for 2 month i.e. Feb & Mar and remaining 4 months expenses will be debited to prepaid expenses so that it can be expensed off in the next year which it pertains to.
Further, Expenses will be booked for 2 month i.e. Feb & Mar and remaining 4 months expenses will be debited to prepaid expenses so that it can be expensed off in the next year which it pertains to.
Vipul Acharya
(Account Officer)
(647 Points)
Replied 25 May 2020
But Invoice is of May -20, then how we can make prepaid expense of remaining amount
CA ABHAY GUPTA
(Practice)
(3230 Points)
Replied 25 May 2020
A prepaid expense is a type of asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future.
in the given case payment is not made in advance thus it is not a case of prepaid expense.
secondly the bill dated May, 2020 since expenses belongs to previous year also thus expense pertaining to feb and March need to be booked in that particular month else expenses will not be allowed. TDS need to be deducted proportionally as expenses booked meaning tds for the month of feb and march to be deducted in feb and march and to be paid.
in the given case payment is not made in advance thus it is not a case of prepaid expense.
secondly the bill dated May, 2020 since expenses belongs to previous year also thus expense pertaining to feb and March need to be booked in that particular month else expenses will not be allowed. TDS need to be deducted proportionally as expenses booked meaning tds for the month of feb and march to be deducted in feb and march and to be paid.
Asha Kanta Sharma
(Manager - Finance & Accounts)
(36355 Points)
Replied 26 May 2020
TDS needs to be deducted in the month of March itself.
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