Benefit treatment under Section 194R

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This discussion concerns the correct accounting treatment for Tax Deducted at Source (TDS) under Section 194R, specifically when a supplier incurs expenses for a foreign trip related to target achievement. The core question is how to book the Rs. 8,000 TDS debited by the supplier on an Rs. 80,000 expense. Experts suggest the second option, debiting 'Travelling Expenses' and crediting 'Incentive A/c' for Rs. 80,000, is correct if the trip was for business promotion.

satish kumar Chauhan

satish kumar Chauhan (Querist)
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28 August 2025 R/sir

Supplier taken TDS against foreign trip for target achivement. and exps incurred by supplier on forign vist and they have debited Rs. 8000/- to our A/c on A/c of TDS 194-R on Rs 80000/-.what should be correct entry in books:
Capital a/c Dr and Cr to Incentive A/c by Rs. 80000/-
or Traveling Exps DR and Cr to Incentive A/C by Rs. 80000/-
or No need this entry in Books
tahnks to all experts for their prompet reply in advance