Hello Frnds,
Can any one please tell me when is the liabiilty of TDS to be created in the books. Whether it is to be crreated at the time of payment or it is to be created at the time of making the provision for salary. (would appreciate if sec no.s are specified )
As I have a client who creates the Provision for salary for MIS pupose ever month end by passing an entry
Provision for Salary A/c Dr.
To Salary Payable.
Then on the 7th of next month salary payment is made and the following entry is passed
1. Reversal of the provison made ie.
Salary Payable A/c - Dr
To Provision for Salary
2. Payment of Salary :
P/L A/c Dr.
To Cash / Bank
To TDS.
As the due dates for payment of salary changes if TDS liability is created at the time of making the provison.
Please Suggest
CAclubindia
