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TDS entry of audit fees

05 May 2011

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

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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

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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

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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.

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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 :-)