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Provision for Expenses

This query is : Resolved 

Sir,

I have receive the Professional bill for the month of March in April Dated April what entry should be passed in the books of accounts and Also i want to know when should i deduct the tds in the month of march or in the month of april 08


if you are received bill in april then you will pass jv on 31/03/2008 & you will pay tds before 31/05/2008 so it will allowed in the f y year 2007-08
if you want to paid in the year 2008-09 then you will pay tds before 07/05/2008

TDS should be deducted on accural basis even though its a provision.

There is another altenative where -in you accumilate the TDS amount and at the year ended pay full TDS amount along with interest.

However, the first method makes more sense.

Entry:-

Vendor a/c Dr...
To TDS payable a/c.


31/03
Dr. Expense
Cr. TDS Amount
Cr. Outstanding Liabity

Before 31st May

TDS Dr.
Cr. Bank A/c.

when payment to party

Outstanding Liability Dr/

Cr. Bank

Entry is
Expense Dr
TDS Dr
O/s Liability Cr

The above entry would be passed in the month of March

I AGREE WITH C.A SRI HEMANT DEWANI.
R.V.RAO



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