Accounting method on tds deduction from salaries
This query is : Resolved
30 December 2015
Dear Sir,
On payment of Salaries I am making the following entry:
Salaries Dr. 10000 (Gross)
To Cash Cr. 10000
and
Cash Dr.1000
To TDS Cr.1000
i.e. I am showing TDS as receipt on making Gross Salaries a/c. Whenever I am paying TDS I am making the Entry as:
TDS Dr. 1000
To Cash Cr. 1000
Someone asked me to make entry as:
Salaries Dr. 9000
to Cash Cr.9000
and on payment
TDS Dr.1000
To Cash 1000
Please suggest me which one is correct. What are accounting methods.
-Mohan
On payment of Salaries I am making the following entry:
Salaries Dr. 10000 (Gross)
To Cash Cr. 10000
and
Cash Dr.1000
To TDS Cr.1000
i.e. I am showing TDS as receipt on making Gross Salaries a/c. Whenever I am paying TDS I am making the Entry as:
TDS Dr. 1000
To Cash Cr. 1000
Someone asked me to make entry as:
Salaries Dr. 9000
to Cash Cr.9000
and on payment
TDS Dr.1000
To Cash 1000
Please suggest me which one is correct. What are accounting methods.
-Mohan
CA PARAS BAFNA
(Expert)
30 December 2015
You may follow your accounting method. However you can make the entries by inserting "Salary Payable A/c.
You may do this in the manner - Salary A/c (Dr) 10000 To TDS A/c1000 & To Salary Payable A/c 9000.
At the time of payment Dr Salary payable a/c and TDS A/c by Cr Cash/Bank A/c .
You may do this in the manner - Salary A/c (Dr) 10000 To TDS A/c1000 & To Salary Payable A/c 9000.
At the time of payment Dr Salary payable a/c and TDS A/c by Cr Cash/Bank A/c .
Message likes :
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31 December 2015
Thank you very much for your detailed and quick reply dear Paras sir,
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