Journal entry
This query is : Resolved
23 August 2011
proprietorship Concern :namely PEC, (a Tution coaching centre)
Another wings of the same concern PSGP Ltd.(middle man)
Creditors raised addv & Printing bill on PSGP Ltd say Rs. 1000/-, Then PSGP raised bill on orginal assessee added 12% there commission and raised invoice of Rs. 1200/-,No one deduct TDS under sec 194C.
Now PEC paid TDS of Rs. 10/- (not Rs. 12/-)out of its own pocket,
please clarify me whether following entry is correct,
Addvrtisement ..Dr 1000
To Orginal Creditors 990
to TDS 10
Orginal Creditors Dr 990
Advertisement dr. 210
To PSGP 1200/-
TDS Payable Dr 10
PSGP 1200
To Bank 1210/-
if wrong what will be the correct entry
cosidering TDS provision ?
Another wings of the same concern PSGP Ltd.(middle man)
Creditors raised addv & Printing bill on PSGP Ltd say Rs. 1000/-, Then PSGP raised bill on orginal assessee added 12% there commission and raised invoice of Rs. 1200/-,No one deduct TDS under sec 194C.
Now PEC paid TDS of Rs. 10/- (not Rs. 12/-)out of its own pocket,
please clarify me whether following entry is correct,
Addvrtisement ..Dr 1000
To Orginal Creditors 990
to TDS 10
Orginal Creditors Dr 990
Advertisement dr. 210
To PSGP 1200/-
TDS Payable Dr 10
PSGP 1200
To Bank 1210/-
if wrong what will be the correct entry
cosidering TDS provision ?
27 September 2011
Well brother PGSP is our agent only and not another third party. be clear of the same
27 September 2011
as per explanation given by you it seems that PGSP is working on our behalf and carrying the transaction on our name as business auxillaiary services
27 September 2011
Rs 1,000 is our original liability towards the orginal creditor for the work contract of Advertising and printing bill
27 September 2011
Rs 200 is the commision of PGSP and it is just charged just as agent commision not as Advertising expenses
27 September 2011
Since, PGSP is working as agent for you therefore u r required to deduct TDS u/s 194 H @ 10 % if the yearly amount exceeds prescribed limit of Rs 5,000
27 September 2011
But, the expenditure towards advertisement is ur expenditure and for the same TDS is reqd to be deducted @ 1 % u/s 194C
27 September 2011
The correct entry for the above shall be
Booking of expenses
Advertisement Expense A/c DR 1000
Advertisement Commision DR 200
To PGSP 200
To TDS 10
To Advertising Agency 990
Booking of expenses
Advertisement Expense A/c DR 1000
Advertisement Commision DR 200
To PGSP 200
To TDS 10
To Advertising Agency 990
27 September 2011
Advertising AGency DR 990
To PGSP 990
if the amount of agency is to be paid by agent
To PGSP 990
if the amount of agency is to be paid by agent
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