Query ON belated tds deduction

This query is : Resolved

ntc pioneer (Querist)
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20 November 2025 bill of 40000 received from x enterprises for painting services

bill of 40000 received from x enterprises for painting services

rs 20000 was paid by debiting expenses and crediting bank .

bill was not accounted nor was TDS deducted

now after 2 years the remaining amount is to be paid

whether tds is to be deducted ?

what are the entries to be passed ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 November 2025 Now, when paying the balance ₹20,000, TDS must be deducted because this is the first time you are crediting the vendor’s account (or making payment).

• On the earlier ₹20,000, you are exposed to TDS default consequences (interest u/s 201(1A), possible penalty).
• On the current ₹20,000, you must deduct TDS before payment.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 November 2025 Since the full ₹40,000 was never accounted, the entry should be passed now:

Painting Expenses A/c Dr. ₹40,000
To X Enterprises (Creditors) ₹40,000
(Being painting expense and outstanding liability accounted now)

Reverse prior expense entry:
Bank A/c Dr. ₹20,000
To Painting Expenses A/c ₹20,000
Pass correct payment entry:
X Enterprises A/c Dr. ₹20,000
To Bank A/c ₹20,000

TDS to be deducted on ₹20,000 (remaining amount).

Assume TDS rate under Section 194C: 1% (if to individual/HUF) or 2% (if to other than individual/HUF); for this example, assume 1% = ₹200.

X Enterprises A/c Dr. ₹20,000
To Bank A/c ₹19,800
To TDS Payable A/c ₹200
(Being payment of balance to X Enterprises after deducting TDS)

ntc pioneer

ntc pioneer (Querist)
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21 November 2025 Thanks sir.

But is it correct to pass a journal dr/cr bank/cash.
Can I cr expenses 20000 and Dr x enterprises for reversal of prior expenses entry

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 November 2025 Yes, without that you cannot deduct TDS over the aggregate bill of Rs. 40k.

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