16 April 2009
We are closing books of accounts quarterly in order to publish our results half yearly.We used to create provision for contact payments and remit the Tds amount on due date.But acutal contract bill value may be less or more.This creates problem in filing Tds return. Shall we postpone making provision entry later stage after receipt of actual bills? Or Suggest any way to solve this issue.
16 April 2009
It is like advance tax which is to be preassessed like that you need to make provision on your best estimation. Even provision itself shows pro vision.
If actuals are mre or less then it can be adjusted at later date.
16 April 2009
In practice, you may keep the provision separately as adjustment entries without having any effect over the books of accounts, for the purpose of closing books of accounts.
As you do not know the exact amount of contract, ie if contract amount is not ascertained it does not amount to accrual.
Account for the transaction when it is due(ie when proper invoice is issued) and pay TDS at that time. If any advance is paid you can deduct TDS on that much amount.
02 July 2009
You don't have to keep the provision out of the books. Create the provision on the last date and reverse it on the next day. Deduct and pay tax as and when the bill is received.
CAclubindia
