02 January 2010
DEAR SIR WE HAVE SUB CONTRACTORS(X,Y,Z). WE ARE PAYING TO THEM(X,Y) THROUGH BANK ACCOUNT BUT ONE SUB CONTRACTOR THERE IS NO BANK ACCOUNT(Z). AT THIS SITUATION WE ARE PAYING TO THAT SUB CONTRACTOR(Z) THROUGH ANOTHER SUB CONTRACTOR BANK A/C(X) IS IT CORRECT OR NOT ? IN THE ABOVE SITUATION WE ARE PASSING THESE ENTRIES: 1.X A/C DR 2. Z A/C DR TO BANKA/C TO X A/C
NOTE: WE ARE PAYING AMOUNT NEARLY 7 TO 8 LAKHS TO SUB CONTRACTOR (Z) 1. IF THE ABOVE PROCEDURE IS CORECT WHICH SECTION WILL APPLY? 2. IN THE ABOVE PROCEDURE IF THERE IS ANY DISALLOWANCES WHICH SEC WILL APPLY? THANKS IN ADVANCE
02 January 2010
From view point of Income Tax it is ok if you are charging the requisite TDS, since you can pay the party thru any media i.e. to say cash, bank, or for any other consideration...
Bot instead of passing the composite entry, pass the dual entry for the clarity..
CAclubindia
