Bhavesh (Accounts) (899 Points)
27 March 2013Our Firm is engaged in Jewellery Business. We give advance to the babus for preparing a jewellery for our customer. Now my questions 1) is whether to deduct the TDS on advance pymt. made as labour charges, 2) If the Babus (Labour) has balance pymt. in his account, whether TDS to be deducted on the Balance pymt. as well, 3) How to Post the Entries for Advance pymt. to Labour & TDS deducted to labour. Kindly Pls. help. Thanks
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 27 March 2013
As per section 194C TDS is required to made at the time of payment or credit whichever is earlier. As advance is being made to the persons, so TDS needs to be made at the time of paying the advance. However it needs to be ensured that the requirement for making TDS towards 194C is that the single payment shoudl exceed 30000 or aggregrate of payment shud exceed 75000, then only TDS needs to be made.
At the time of raising each bill you will need to check if the single bill exceeds Rs 30k or if it does not then aggregrate bills shud exceed 75K. After ensuring this deduct the balance TDS.
Post the following entries for making advance payment and TDS tehreon.
Supplier A/c Dr xxx
To- TDS Payable xxx
To-Bank xxx
For making paymetn of TDS to Govt post following entry
TDS Payable Dr xxx
To-Bank xxx
Bhavesh
(Accounts)
(899 Points)
Replied 27 March 2013
Thanks Giridhar, But what if the Balance Labour Payable to the Babu for eg.: TDS deducted on advance pymt. of Rs. 40,000/- say 1% for the month of April 2012 and paid the balance amt. For the Next month the Bill has raised for the Rs. 30,000/- and TDS deducted @ 1% on the same. The entry has been booked as follows:
Labour Chgs. A/c. Dr. Rs.30,000/-
To Babu A/c. Cr. Rs.29,700/-
To TDS Payable Cr. Rs. 300/-.
so while making the payment to the babu, the amt. has to be paid as rs.29700/- as tds has been already deducted. My question is while booking for the Labour charges (the same entry continues for every month) and TDS deducted on the same,making the balance payment TDS deducted has to be deducted.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 27 March 2013
tds to be deducted on payment or credit whichever is earlier subject to above mentioned rule.
tds is also to be deducted on balance payment after adjusting advace (if applicable)
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 27 March 2013
in the above eg. if advance payment is made for rs.40000 and labour charges bill raised for 70000 than only on balance payment i.e. on 30000 tds to be deducted.
the actual payment to supplier would be
39600(for advance after deducting tds)
29700(balance payment)
dattarhu
(senior Account )
(28 Points)
Replied 27 March 2013
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 28 March 2013
TDS is not requried to be made on materials purchased its only on services rendered
Shivang Chokshi
(C A )
(182 Points)
Replied 28 March 2013
dattarhu
(senior Account )
(28 Points)
Replied 28 March 2013
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