Accounting for travel agent

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abhijeet (Querist)
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29 June 2016 Dear sir,

please help me for following querries:

1) I have one Non IATA Travel Agent(Say X) he is buying Air tickets from Go-Air or from some other IATA and non IATA agents(Say Y ) the bill consist of detail as under eg.
Ticket Amount Rs.50,000
Less: Handling Chg. Rs. 2,500
Add: Service Tax Rs.5,150
Add: TDS on H.Chg. Rs. 283
---------
Net Due Rs.52,933/-

For This X paid the amount by Ch. To Y Rs.52933/-

Now X issue this ticket to (Say Z ) and charged Rs.55,150/- which he gets from Z by way of Ch.for Rs.55,150/-

Now what will be the accounting entry in books ( Whether this will be sale and purchase of ticket or commission income suggest me ) is there any procedure for travel agents to book entries.

2) what will be the amount of turover for the purpose of TAX Audit,
Commission Amount or Sale Amount

3)Is Travel agent is cover under the Provison of U/s 44AF for for payment of income tax if its turnover is not exceeding for Tax Audit under Income Tax ??

Expecting reply at earliest.

Saket Jain

Saket Jain (Expert)
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29 June 2016 1) Accounting entry
Customer A/c Dr 55,150/-
TDS Receivable A/c Dr 283/-
To Go Air/X Cr 52,933
To Commission A/c Cr 2500/-

2) For Turnover purpose only commission income will be considered

3) Tax Audit Limit Rs 1 Crore.
44AD is not applicable in case of commission income. (Benefit of Earlier 44AF is now available under 44AD)

Regards

abhijeet

abhijeet (Querist)
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30 June 2016 Thank u so much saket, but what if we recvd amt in bank n paid from bank for above transaction

2. Under what head the customer ac and go air ways ac should be maintained

Saket Jain

Saket Jain (Expert)
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30 June 2016 When you receive or paid amount you debit or credit Party account. e.g payment made to airline then Debit Airlines and credit Bank.
Since airline and customer are current asset/ liability you may show them in Sundry Debtor/ Creditor head.

abhijeet

abhijeet (Querist)
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30 June 2016 Thanks sanket got it

abhijeet

abhijeet (Querist)
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26 January 2017 Hi ,

What if all the anounts are routed through our bank? And supplier is invoicing in our name and we are invoicing to client for full amount..

What to do we are very confused help me as earliest

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