Answer Posted / hamsa
Usually TDS needs to be deducted on services provided and not on the purchases. So, that should be debited to the Expenditure account (i.e Professional Fee, Construction Fee, Salary etc..)
Journal Entry will be:
Expense Account Dr
TDS Payable Account CR
Party Account CR.
While making the payment
Party Account Dr
Cash or Bank Account.
It's better to deduct the TDS while entering the bill instead of deducting at the time of payment to party, becoz there is chance of missing the deduction. As per 40a of the Act, we need to deduct TDS at the time of expense or payment which ever is earlier.
Usually, the booking the expenditure will take place earlier than the payment.. of course in exceptional cases we pay as advance.
Is This Answer Correct ? | 17 Yes | 1 No |
Post New Answer View All Answers
calculations of pf
What is account receivable?
if a sole proprietor pays his firms insurance policy , How it should treated in books of accounts? whether it should be treated as investment? or indirect expenses?or drawings?
Role-specific management accountant job interview questions:
What is accounting for plant assets?
Other accounting interview questions to expect when you interview for an accountancy job include:
I wana give interview as a accountant what the question will asked by interviewer ??? Please suggest me so I can clear inteview. abhinandan
Do you know retail banking?
Explain what is the disadvantage of double entry system?
'Talk me through an example of how you have used data to improve your teams productivity.'
Tell me what is working capital?
What are the differences between accounting and auditing?
Why company issue shares at discount as its a loss ?
What is the use of accounting?
If a promoter has purchased an asset on behalf of the company before the incorporation of the same then what will be the accounting treatment to record the asset in the books of company