TDS Query

(Guest)

Hi all,

I have one query regarding TDS, I explain it through the Example, please help me.

A Ltd (Courier Co.) provides a courier service to B Ltd of Rs.30000/-. At time of payment B. Ltd deduct the TDS @ 2.06% and make a payment of Rs. 29382/- (30000-618). So Entry for the receipt of payment in the books of A Ltd is :-

Cash / Bank A/c 29382

TDS (Assets) 618

To, B Ltd 30000

So, my question is the TDS which appeared in Assets Side, till what period it will appear in Assets side in Balance Sheet?

& how we recovered TDS & what will be the entry for the same?

Please also tell me what is Lower TDS certificate? & there is any rate specified in law for Lower TDS?

Please reply me through email : purviva @ yahoo.co

REPLY

TDS appears in assets side can be adjusted from Income-tax if anypayable otherwise the same will be refundded from the Income-Tax Deptt. after filing of Income-Tax return after the close of financial year. Suppose If we received refund of TDS from the Income-Tax Deptt. then we made the following entry in our books

Bank A/c Dr.

TDS A/c Cr.

Interest A/c Cr

(Int.if any allowed by the Deptt.)

2. For lower rate of TDS:- If we want that paying party deduct our TDS at less rate, then we have to apply to Our Income-Tax officer for lower rate of deduction of tax . If Income-tax Officer agree with out application, then he issue a certificate u/s 197 of the Income-tax Act,1961 and wherein he mention the rate of TDS to be deducted. A copy of the said certificate is to be sent to the party concerned from we receive the payment.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 11 August 2008

Yes Purvi,

Mr DHARMENDER GUPTA is absolutely right in saying that

1. It can be adjusted with Income Tax,if any payable.

2. Otherwise you will get refund from IT deptt and

3. For lower deduction of TDS you have to apply to IT deptt for "Certificate for lower deduction of TDS" and give a copy of the same to Deductee.

Manoj Gupta (Service) (58 Points)
Replied 11 August 2008

Originally posted by :CA Prakash

"

Yes Purvi,
Mr DHARMENDER GUPTA is absolutely right in saying that
1. It can be adjusted with Income Tax,if any payable.
2. Otherwise you will get refund from IT deptt and
3. For lower deduction of TDS you have to apply to IT deptt for "Certificate for lower deduction of TDS" and give a copy of the same to Deductee.

This entry will be in the books till the assessment is over.

"

Purvi (Student) (82 Points)
Replied 22 August 2008

Thanks All, for your reply.

jainamit26aug (CA Business) (15 Points)
Replied 22 September 2008

If a TDS dedutor objects for issuing TDS certificate to the deductee, what course of action is open for deductee

Prakash (Service) (24 Points)
Replied 02 July 2009

Dear Purvi,

In respect of First query for TDS deducted by B,For A Ltd it will treated as payment of advance tax.Hence to that extent advnace tax payment of A will be lower.The amount lying in asset side will be transferred to Advance Income tax A/c after filing the Income Tax return.

For lower deduction , the assessee has to approach the Assessing Officer and provide an application for the lower deduction certificate.The AO takes in to account the last three years average income and tax payable on the same.

E.g Last three years average income is 100 and tax payable by him was only Rs.10

In current year the income is projected as 150 and tax payable by him will be Rs.15 while because of the TDS rate , the tds deducted will be 25.The AO officer accoringly reduces the TDS rate to match with Rs.15 in a year.

krishma (student) (21 Points)
Replied 23 April 2010

sanjay kumar (accountant) (21 Points)
Replied 16 March 2012

plz give me about full knowledge of TDS and TCS entries in deducter and deductees book AND payment forms, certificates AND most require all related ledge creation under tally and some important dates with form details.

my email address- sanjaybhrdwj670 @ gmail.com

S.K.Bhardwaj

9582175933