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TDS assets

Yasaswi Gomes new (Finance ) (4492 Points)

28 October 2023

From TDS u/s 192 till 202, for different TDS applicabilities, what sections creates TDS asset?

I think TDS is usually a liability correct?

Eg. I'm a company with suplpliers

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18 Replies

sabyasachi mukherjee (26513 Points)
Replied 28 October 2023

There is no tds asset as such

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 28 October 2023

TDS (Tax Deducted at Source) is a concept aimed at collecting Tax at every source of income. In balance sheet, it is shown in the assets section, right after the head current asset.

TDS is a mechanism aimed at collecting tax for every source of expense or payment. It is shown on liability.

Is that correct?

Yasaswi Gomes new (Finance ) (4492 Points)
Replied 28 October 2023

@ sabyasachi

https://www.hostbooks.com/in/blog/tds/tds-entry-in-tally/#:~:text=What%20is%20journal%20entry%20for,vendor%2Fsupplier%20with%20same%20amount.

Maybe you are tired and need some rest. Three entries must be made against tds on salary income.

1. Recording Revenue: Initially, you record the revenue earned for your services, along with the total amount due from the client.
2. Receiving Payment and Booking TDS Receivable: The second entry reflects the actual amount received from the client (net of TDS) and recognizes the TDS receivable as an asset.
3. Receiving TDS Amount: The third entry accounts for the TDS amount that will be considered as Tax paid and adjusted against your tax liability.

RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 28 October 2023

I think TDS is usually a liability correct?

Yes, If You are a deductor...
After paid it's tallied.

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 28 October 2023

If I knew it I wouldn't read off the inter in vain where your information given about AFTER PAID is not clearly understandable online websites.

So when I make a sale, the debtor cuts tds and deposits with the government at the year end. Then we have to recognise that TDS amount in current assets. Finally, do we have to

Output TDS - Input TDS?

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RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 28 October 2023

Your first query and Your last reply is different.

So, Ask correctly then You can get exact solution or views...

Now,

As per Your query and with my understanding...

At the year end :

If You are a deductor then its under liability...

If You are a deductee then its under Asset...

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 28 October 2023

This is nice. Of course I started asking about how to recognise TDS asset and now it's not required as I'm aware of journal entries, trsheolds and rates for various tds.

So since you have mentioned that once the deductor eg. Customer or someone buying our services deducts tax and files for it on every 15th per say. So the deductee also has to include that TDS amount as asset?

How can anyone know that deductor deposited the tax amount and filed for it?

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RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 28 October 2023

How can anyone know that deductor deposited the tax amount and filed for it?

Ans : It can be through form 26as...

( But, Out of query it's very bad activities by deductors. Bcoz, many more persons can't deposit on time and also avoiding. For Confirmation of this we want collect "FORM 16 and FORM 16A" )

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 28 October 2023

Alright! That's over with tds. No matter if the deductor files or delays we have to recognise TDS asset immediately during the time of income and verify it through Form 16 or 16a. I understood what your explaining because sales is recognised as net of taxes (GSTR & TDS and other taxes) and discount.