06 December 2011
I have consultancy bill of Rs.400,000/- (including service tax), with invoice date 1-Nov-2011, but for Oct-2011 consultancy fee. I deducted TDS on this invoice @10%. Can i Book it in 31-Oct-2011? In which month this invoice liability booked? Is it consider the liability of Oct-2011? or Nov-2011?
06 December 2011
Though it relates to the month of October it will be booked on 1st Nov and TDS will be deducted. The deducted TDS will be required to be paid on or before 7th December in ITNS 281.
However, had it been the case of March, you would be required to make a provision for such exp on 31st March itself & accordingly the TDS would also be required to be deducted on 31st March.
Within a financial year, you should follow a convention of booking an expense, not earlier than its bill date. Its a prudent practice.
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