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Tds with interest entry

CS Dhawni Chandan (Assistant Company Secretary at MNC) (9 Points)

24 February 2016

What will be accounting treatment of TDS with interest on delayed deduction - Is my below understanding correct- Trade liability(Cr A/c) Dr 100 Other taxes. Dr 10 Payable

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CS Dhawni Chandan (Assistant Company Secretary at MNC) (9 Points)
Replied 24 February 2016

Please ignore posting error- Trade liability (Cr A/c) Dr 100 Other taxes ( Interest) Dr. 10 Payable Cr. 110 Payable Dr. 110 Bank. Cr. 110 Or shall i only make Tds provision on date of deduction and make interest entry when actual tds is paid??

CA MANISH SAXENA (Partner) (561 Points)
Replied 25 February 2016

Hi Dhwani,

I could not understand your accounting entry evn after reading mutiple time.

Debtor A/c Dr XXX

To Creditor XXX

Please write in this formet then will be easy for me to answer your query.

CS Dhawni Chandan (Assistant Company Secretary at MNC) (9 Points)
Replied 25 February 2016

Hello Manish Vendor A/c Dr 10 Interest A/c Dr 1 To TDs payable A/c. 11 So my question is payment entry would be- TDs payable A/c Dr 11 To Bank A/c Cr. 11 Is the above correct, as payment of interest will be done separately and we cannot charge to vendor for interest?? I am confused with payment entry