TDS on Reimbursement

TDS 495 views 1 replies

The seller of the goods pays the frieght amount first. At later the purchaser pays back the frieght amount to the seller.

here the seller passes the entry ----

                   Frieght      Dr     30000

                           To   Bank              30000

when he receives the frieght amount from the purchaser, then the following entry is passed

                  bank      dr      30000

                       To frieght                30000

it is abserved that there is no expense and no income. the account is nullified.

now my question is, the seller is requied to deduct tds.

if not deducted , then what is the liability

Replies (1)

The liability is on the seller only, coz, he is the person responsible for making the payment to transporter.So he has to deduct TDS on 30K and make the balance payment to transporter. He then has to deposit the TDS amount to the govt. however, he will receive the entire 30K from buyer


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