If one party uses the machinery in a year without fixing the rate.
It pays the amount to the machinery owner as deposit during the year from time to time without considering the rent aspect.
At the end of year both the parties mutually agrees to transfer the deposit account to the rent payable account and fixes the rent.
When the TDS on rent is payable ? Is it on 7th April or till the filing of the return.
In my opinion, the entry of rent is to be treated as book entry as the rent was not fixed and the amount paid was not shown in the rent payable account during the year. The transfer from the deposit account to rent payable account is also through journal entry.
Pl. give your opinions.
CAclubindia
