Tds

This query is : Resolved

ravi kumar (Querist)
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09 April 2013 SIR, PLEASE TELL ME I HAVE ONE DOUBT ABOUT IF TDS IS DEDUCTED FROM RENT PAYABLE. I GOT THIS DOUBT BECAUSE WHEN YEAR ENDING RENT PAID TO CONCERN PARTY NOT ISSUED BILL THEN WE DEDUCT THE TDS OR NOT, AND PASS THE ENTRY OR NOT.
PLEASE TELL ME URGENT

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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09 April 2013 If the party is not issued bill then you not give the credit to the party for the payment of rent so no need to deduction of TDS.

However for the purpose of following of accrual basis of accounting at the end of the year you have to pass the following entry to create the provision for rent payable for such year/month.

Rent a/c dr
To Rent payable a/c

(Being provision for rent payable for the year provided)

at the time of receipt of bill pass the following entry

Rent payable a/c dr
To TDS a/c
To Party a/c
(Being rent bill for the month or year received and the payment liability created)

at the time of payment of rent

Party a/c
To bank a/c
(Being amount payable to party paid)

at the time of deposit of TDS

TDS a/c
To bank a/c
(Being TDS amount for the month deposited)

So according to the conditions of deduction of TDS. TDS should be deducted at the time of payment or at the time or credited into the books which is earlier. So without receipt of bill you can't give credit to the party or can't paid to the party.

OM SAI SRI SAI JAI JAI SAI

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