Journal entry

This query is : Resolved

soumya (Querist)
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27 December 2014 I have a situation. the company has outsourced the work to BPO company. on behalf of client we had deducted income tax from the vendor who does business with our client. please assist the journal entry.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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28 December 2014 In your case a Company has outsourced some works of their clients to outsiders. Then Entry will be.
At the time Income Accrue
Client A/c Dr
to professional receipt
To Service tax

At the time of receipt from the clients
Bank Dr.
To client

At the time TDS certificates received from clients
TDS receivable Dr.
To Client

At the time of expense booking, for outsider
Expenses A/c Dr.
Service Tax Dr (If any and eligible for cenvat credit)
To Vendor A/c
To Tds payable. (excluding Service tax)

At the time of making payment
Vendor a/c Dr
To bank

Rupesh Jain

Rupesh Jain (Expert)
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29 December 2014 you deduct the tds and make entry in books

vendor a./c
to TDs payable a/c

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