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Private contractor entry in tally

uday rao (22 Points)

22 February 2023

if we are paying to a private contractors without gst bill like the contractors doesn't have a company and doing work as a freelance something...i do we should record those entries in tally and what amount of percentage should be calculated and please give full details please.

thank u in advance.

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14 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

sorry for miss interpretation the query earlier .

Yes , you have record these transitions , in the books of accounts as a part of business .

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

Also check regarding TDS applicability under section 194 (C) of the Income tax act - ( payment to contractor )

uday rao (22 Points)
Replied 22 February 2023

I mean if a person is ABC so the entry will be

By ABC A/c Dr

To contractor expenses Cr

By ABC A/c Dr

To bank A/c cr

And if the second entry is correct then the ABC comes under which head

1 Like

uday rao (22 Points)
Replied 22 February 2023

This ABC preson is an individual

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

Contract Expenses A/c Dr
To ABC A/c Cr
( Booking of an expense)

ABC A/c Dr
To Bank A/c Cr
( payment entry)

ABC A/c will be under Trade creditor, Current Liability, Balance sheet.

1 Like

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 22 February 2023

@ Uday Rao,

Are you payer or recipient of service ?

7 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

He is receiving services from ABC .

2 Like

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 22 February 2023

@ Uday Rao,

If you are the recipient of service then it is expense and you should correct the first entry and it is wrong

8 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

Accordingly I have corrected..........

1 Like

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 22 February 2023

👍🏻👍🏻👍🏻

1 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

If TDS is applicable for Payment to Contractor then you pass entry.

Contract Expenses A/c Dr
To ABC A/c Cr
To TDS payable. A/c Cr
( Booking of an expense, TDS payable)

1 Like

uday rao (22 Points)
Replied 22 February 2023

Contractor expenses account comes under what head...?

Is it under indirect expenses

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 22 February 2023

Yes , Indirect expenses, Profit and Loss Account.

1 Like

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 22 February 2023

How much is the amount?

What is the quantum of turnover/ expected turnover of contractor ?

If it exceeds threshold limit then GST registration is required and GST has to be charged

8 Like