Accounting of tds

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Jigar Chudasama (Querist)
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11 July 2014 Dear Experts,
Hello,
My query is
An assessee who is individual has paid some amount say Rs. 150000/- to a builder from whom he is going to purchase a residential flat. On this payment he has deducted tax @ 1% amounting to Rs. 1500 and duly deposited with government.
How to account this Rs. 1500, which is deducted tax by individual, in his books of accounts i.e . in the books of purchaser of residential flat?/
thanks in advance..

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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12 July 2014 Hi Jigar,

TDS entries will be,

When TDS is deducted,

Party / builder's a/c. Dr.1500
To TDS payable a/c. Cr.1500

When TDS is deposited with govt.,

TDS payable a/c. Dr.1500
To Bank Dr.1500

Thanks,
Devanand

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Jigar Chudasama

Jigar Chudasama (Querist)
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14 July 2014 thank you sir,
but will it capitalize with the cost of the building afterwards??

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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14 July 2014 Hi Jigar,

Total amount of Rs.150000 will be capitalized.

TDS will not affect value of building to be capitalized.

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