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TDS on Rent Entry

JAGADISH (STUDENT) (49 Points)

17 March 2011

Hello,

Can any one help me what will be entry pass the follwing?

Mr,X Recived Inovice of Rent from MrZ Rs 110000 on ST10.30%

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12 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 17 March 2011

I assume invoice amount 110000 excluding from service tax..

Invoice gross amount will be 121330.00

RENT A/C DR. 121330

TDS CR. 11000.00

MR.XYZ CR. 110330.00

MR. XYZ DR. 110330.00

BANK A/C CR. 110330.00

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Athmaram (Articled Assistant) (170 Points)
Replied 18 March 2011

Pankaj Ji is correct

But if Mr.X is taking credit of Service Tax then the entry ill be as follows,

RENT A/C DR. 110000.00

SERVICE TAX A/C DR. 11330.00

TDS CR. 11000.00

MR.XYZ CR. 110330.00

MR. XYZ DR. 110330.00

BANK A/C CR. 110330.00

THANKS & REGARDS

RAM.

TUSHAR MADAAN (ARTICLE ASSISTANT) (29 Points)
Replied 18 March 2011

i think, TDS should be deducted on gross amount. But mr. Athmaram have taken on net amount excluding of service tax. so, the tds will be deducted on Gross amount. Which is Rs. 121330/-. the entry is.\

Rent A/c Dr. 110000

service tax a/c Dr. 11330

Tds. Cr. 1233

mr. xyz Cr. 120097

Athmaram (Articled Assistant) (170 Points)
Replied 18 March 2011

Dear Mr Tushar,

As per Income Tax Act for TDS on Rent need not be deducted on Service Tax Component.

As per Circular No.4/2008, Dated 28-04-2008.

Please Find The Attachment.

Thanks & Regards

Ram.

Attached File : 26 tds on service tax.pdf downloaded: 1034 times

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PRADEEP CHAND SHARMA (Accounts Officer) (141 Points)
Replied 18 March 2011

TDS on Rent should be deducted on Gross Amount Excluded Service Tax.

& other than Rent TDS should be deducted on Net Amount

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Dhiren Beura (CWA,CA FINAL) (50 Points)
Replied 18 March 2011

Excluding Section 194I TDS is deducted on gross amount of the bill including service Tax.

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Raunak (CA Final) (227 Points)
Replied 19 March 2011

!!! ru kiddin me?? this was d same question asked this nov 2010 pcc exam.

I wrote it wrong :( so tats y i remember it quite well now...

Mr.Tushar s answer is right..!!

Dhiren Beura (CWA,CA FINAL) (50 Points)
Replied 21 March 2011

Originally posted by : Raunak

!!! ru kiddin me?? this was d same question asked this nov 2010 pcc exam.

I wrote it wrong :( so tats y i remember it quite well now...

Mr.Tushar s answer is right..!!

MR. Athmaram is right.Please refer the circular .

It is specifically mentioned in the Direct Tax book written by G.Sekar

Shriram Ramachandran (IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd) (492 Points)
Replied 23 March 2011

I feel this will be more appropreate entry.

When Bill is raised

Rent a/c Dr 110000

Service tax credit unpaid 11330

To TDS on Rent 11000

To Mr Z A/c 110330

When Payment is Made

Mr Z A/C 110330

Service tax Credit Paid A/c 11330

To Service Tax credit unPaid A/c 11330

To Bank A/C 110330

Thanks

R Shriram

CA Saiyum khan (Practicing CA) (690 Points)
Replied 24 March 2011

In my opinion if the service tax credit is being taken then TDS is not required to be deducted on ST component as that component shall not be claimed as expense.

But in the cases where service tax credit is not taken and is part of the total expense then TDS on gross amount should be deducted to be on safer side.

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pradeep kumar (Accountant) (8 Points)
Replied 20 June 2021

Rent Journal Entry in tally

Office Rent A /c 15000

Vibhash Da 13500

TDS On Office Rent 1500

Made payment in Rent

Vibhash Das Dr........................... 13500

TDS On Office Rent Cr ................1500

Bank A/c ......................Cr .................15000

Ayush (Executive ) (6760 Points)
Replied 23 December 2023

The TDS is deducted at a rate of 10% on the rent, but it is applicable only if the annual rent exceeds the threshold of Rs 2,40,000.

Entry for Rent Paid:
Rent.....Dr. [This increases the expense account for rent, reflecting the payment made]
To Bank [This shows the reduction in the bank balance due to the payment of rent]
To TDS Payable [This is a liability account representing the TDS but not yet paid]

Entry for TDS Payable (when paid)
TDS Payable.....Dr [This decreases the liability account, indicating the payment of TDS to the government.]
To Bank [This reflects the reduction in the bank balance due to the TDS payment.]