Query ON belated tds deduction
This query is : Resolved
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 ?
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 ?
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.
• 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.
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)
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)
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
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
21 November 2025
Yes, without that you cannot deduct TDS over the aggregate bill of Rs. 40k.
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