We are in a service industry. If we receive the bills from our contractors for the period prior to March 2012 in May 2012, in this case what we are suppose to do regarding deposit of TDS, as the TDS was supposed to be deposited by 30th April only. Please clarify.... Thanks in advance.
09 May 2012
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1) Since the contractor bill is for the period prior to March 2012, you should book it in the accounts in F.Y.2011-12 on estimated basis so as to avoid disallowance as prior period expense in next year.
3) Since the bill has not been recieved, you have to book the expense on an estimated amount in March 2012. Entry should be :
Expense A/c ....Dr. To Provision for Expenses (or expense payable)
4) As per Section 194C: deduct TDS at the time of credit of such sum to the account of the contractor or at the time of payment whichever is earlier.
5) Since we have not credited the account of contractor or made any payment, hence you are not liable to deduct TDS.
6) Further if you have deducted the TDS in March 2012 then same needs to be paid by 30th April 2012.
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