Entry for mob.adv. recovery

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2011 SITUATION -1

we gave a Rs.10 Lakhs to Sub-contractor for Mob.Adv. entry for the same is

Mob.Advance A/C Dr 10,00,000/-
To TDS A/C 20,000/-
To Bank 9,80,000/-

SITUATION -2
They Submitted Bill for 2 lakhs and we have to deduct 10% of bill value as Mob.adv. recovery
Expenses A/C Dr 200000
To TDS A/C Dr 3600 (180000*2%)
To Mob.Adv A/C Dr 20000
To Bank 176400

Whether the Entry is Correct

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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27 December 2011 First of all, TDS was required to be deducted when you gave the advance.

Since you did not deduct TDS at the time of giving advance, you should have deducted the whole amount of TDS on receipt of the invoice.

Secondly, you have calculated TDS on Rs. 1,80,000/- (after adjusting amount of advance), which again is incorrect.

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2011 first entry I clearly mentioned TDS deduction. Please go through the same and reply.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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27 December 2011 My mistake.

In that case, the treatment is correct.

Since only 10% of the advance is adjusted in the invoice, TDS will be deducted only on the balance amount, which you have computed correctly.

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