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TDS on provision entry

anish (Chartered Accountant) (118 Points)

21 May 2008

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4 Replies

komal (student) (23 Points)
Replied 21 May 2008

The entry will be passed for 31st march 08 in the system. And for non salary the date for payment of 31 march 08 is 31 may 08. So tds will have to be deducted. Also the point of finalisation - the TDS would be deducted on the amount of provision. So whatever is the actual the difference can be adjusted.

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Brahma Reddy (Manager Accounts) (57 Points)
Replied 21 May 2008

For TDS either it is payment or Debiting to P&L which ever is earlier. in this case even for provisional entries also same thing will applicable.

(Guest)

if assessee is following cash system of accounting and client of assessee following mercantile system of accounting, client has deducted tax at source in the month of march2007 but actual payment for this sale is received by assessee in month of april 2007 and has recorded sale in month of april2007 i.e.in p.y.2007-08 as assessee is following cash system of accounting. The issue is whether assessee can claim refund in P.y.2006-07 (When bill is raised by assessee on client and client has deducted tax at source) or in P.y.2007-08 (when actually payment has been received by assessee and sale is booked as assessee is following cash system of accounting)