Reg : treatment of tds

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This query is : Resolved

Deeptha Srinivasa Ragavan (Querist)

21 March 2018 May i know the accounting treatment of the following
Our firm provides travel insurance to our Customers. We dont provide the insurance service directly but we collect the insurance amount from our customer & remit that amount to Insurance Company after subtracting our commission income . As per the agreement between our firm & insurance Company we are entitled to receive 30% Commission on the insurance amount so collected from our customer. The insurance Company is deducting TDS u/s 194H.

For Example- If our Firm is collecting Rs.1,000 for travel insurance from our customer. On Rs.1,000 we are entitled to receive Rs.300 as commission & TDS on Rs.300 is Rs.15. So our net commission is Rs.285 (300-15) & we will remit Rs.700 to the insurance Company. Let me know the Accouting entry for the same.

ALKESH T MEHTA

ALKESH T MEHTA (Expert)

27 March 2018 1.Cash/Bank A/c Dr.1000/-
Travel Insurance Co. A/c Cr. 1000/-

2.Travel Insurance Co.A/c Dr. 1000/-
Cash/Bank A/c Cr. 1000/-
3. Travel Insurance Co.A/c Dr. 285/-
T.D.S.on Commission A/c Dr. 15/-
Commission A/C Cr. 300/-

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