ACCOUNTING ENTRY FOR PURCHASES OF NEW CAR WITH TCS DEDUCTED

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This discussion explains how to account for the purchase of a new car when Tax Collected at Source (TCS) has been deducted. The recommended accounting entry involves debiting the car's value and the TCS paid, and crediting the total bank payment. It also advises adjusting the car's value if insurance premiums are included, treating them as a separate expense.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)
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12 November 2021 SIR,
It assess purchases of new car value rs:13,45,298/- tcs deducted value rs:10340/-
Question:
Assess how to passed accounting entries in books and which amount for car value.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 November 2021 Dr. Car Rs. 13,45,298/-
Dr. Income tax paid Rs. 10,340/-

To Bank 13,55,638/-

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PARAS CHHAJED

PARAS CHHAJED

(Expert)
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13 November 2021 Rs.13.45 lacs might include insurance premium. If it is so, then reduce the value of the car by that amount and debit the insurance premium as insurance expenses.

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