Sir i am Yarn Trader in which we have to give brokrage to brokrage now my broker has not taken brokrage (Total brokrage is more then 1.5 lakh)during the year now he want it is it legal to make books entry (Brokrage expenses)for current FY i.e 2018-19 and would give the actual payment in next FY i.e aome where in after 1 April-19.Please also guide me to how do i make TDS entry for same peraon in my book s and at which rate i have to deduct the payment for TDS also when i have to deposite TDS to goverment account
Please help.
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Hi Parth Amin,
As per Sec. 194H, if you are an individual/HUF and you are not liable to get your books audited u/s 44AB (i.e., not liable to Tax Audit), then you are not required to deduct TDS. Otherwise, you have to deduct TDS @ 5% if the brokerage payment exceeds Rs. 15,000 in a FY.
Since the brokerage amount is Rs. 1,50,000 (i.e., more than Rs. 15,000), you have to deduct TDS @ 5% = Rs. 7500.
Tax is to be deducted at the time of credit or at the time of payment, whichever is earlier. TDS for the month of March is to be paid on or before 30th April.
For example: If you credit the broker in your books on 31st March 2019, then TDS is deductible on 31st March 2019. And that TDS amount has to be deposited to the government on or before 30th April 2019.
Entry to be made in your books:
[Debit] Brokerage A/c - Rs. 1,50,000
[Credit] TDS on brokerage A/c - Rs. 7,500
[Credit] Broker A/c - Rs. 1,42,500
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