suppose audit fees is 45000/-for ay 2011-12 excld service tax.so how will be tds deducted and what will be the journal wentries which we have to make on 31.03.2011.pls help
19 Replies
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 05 May 2011
audit fee- dr 45000
to audit fee payable - 40500
to tds payable - 4500
CA Shraddha Bankar
(CA)
(175 Points)
Replied 05 May 2011
| Originally posted by : CA Navin Jain | ||
 |
audit fee- dr 45000 to audit fee payable - 40500 to tds payable - 4500 |
 |
Azim Khan ACA,CS,CMA*,LLB*
(Proprietor)
(1312 Points)
Replied 06 May 2011
As per me, the amont of service tax should also be included while deducting TDS..
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 May 2011
tds liabilty is arise on the credit amount, there is no question whether credit amount include st or not
sagar
(Chartered Accountant)
(131 Points)
Replied 06 May 2011
But Navin Sir,When The Bill of Audit Fees Will Be Raised By The Auditor, It will consist Service Tax also.
That Means in This Case at 31-03-11 You Deducted less T.D.S(i.e.on Service Tax component) As A Consequence You Deposited Less Tds in F.Y.2010-2011 ???
Plz Correct me !!! Thanx in advance !!! :-)
CA Govind Gupta
(Proprietor)
(152 Points)
Replied 06 May 2011
As per sec 194J TDS on Professional Fees is deductable after including ST amount.
Audit Fees : 45000/-
ST @ 10.3 % : 4635/-
Total : 49635/-
TDS @ 10 % : 49635.00 @ 10.3% = 4964/-
entry in books :
Audit Fees Dr. 49635
To TDS Payable on Professional 4964
To Audit Fees Payable 44671
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 May 2011
There is two aspect releted to provision of audit fee:-
1. as per companies act, provision must be made realted to any type of expenses on accural basis therefore st shall be included in provision of audit fee.
2. in the preview of income tax, tds shall be deducted on credit amount to party, suppose liability is Rs. 1103 included st and assesee make the provision for rs. 1000 then tds would be deducted on rs. 1000.
Consequence when bill raised by the Auditor of rs. 1103,
Rs. 103 would be disallowed as prior period item. and liability of tds on rs. 103 will be arised when bill to be entered.
CA Govind Gupta
(Proprietor)
(152 Points)
Replied 06 May 2011
Sir,
but on base of accural basis if we making provision for the Audit fees we also have to make provision of ST for the same in the same year and the same TDS on both to be deducted on the same in the year from which they are actually related.
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 May 2011
@ Govind,
you are right, but if comapny domot have make any provision then tds liabilty will not arised.
sagar
(Chartered Accountant)
(131 Points)
Replied 06 May 2011
Mr.Govind & Sir Navin,Could You Tell Me If By Mistake Less Tds Deducted(i.e. on ST component) on 31-03-2011 & wen in future say in July 2011 bill raised by auditor,at that time Tds deducted on ST amonut and also paid..???
Wat will be the implication ??? Whether there will be no problem as the Less tds is paid before Due date of Filing of return ???
Plz reply :-)
CA Govind Gupta
(Proprietor)
(152 Points)
Replied 06 May 2011
yes sir, if company not making the provision then there is no question of TDS arise.
But but the company should hav eto make an provision to show True & Fair Books.
so, as for audit fees related to the previous year and also the ST is related to that year.
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 May 2011
@ sagar
if provision is made without st and tds deducted on provision amount then the question os less tds will not be arised
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 06 May 2011
@ govind,
provision related to comapnies act and income tax act are different from each other,
suppose comany has make the provision with st and not deducted tds on whole amount . therfore you can not compare the both act,
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