27 July 2025 Got it! So you made a provision for rent of ₹5,00,000 last year and want to reverse ₹2,00,000 of it this year because it was an excess provision.

Here’s how TDS and accounting treatment would work:

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### 1. **TDS on Provisioned Rent:**

* **TDS is deductible when rent is actually paid or credited to the landlord’s account, whichever is earlier.**
* If last year you made just a provision but **did NOT actually pay or credit the rent to the landlord**, TDS is **not required** to be deducted on the provision.
* TDS should be deducted only when you pay or credit the rent amount.

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### 2. **Reversing Excess Provision:**

* If you reverse ₹2,00,000 as excess provision this year, it means you are reducing your rent expense.
* Since no TDS was deducted on the provision itself (assuming rent not credited or paid), no TDS impact on reversal.

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### 3. **Accounting Entry in Tally for Reversal:**

Assuming last year rent expense was debited and provision created as a liability, now reversing part of it:

* **To reverse provision of ₹2,00,000:**

```
Provision for Rent A/c Dr. ₹2,00,000
To Rent Expense A/c ₹2,00,000
```

This will reduce the rent expense for the current year.

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### Summary:

| Situation | TDS Action |
| --------------------------------- | ----------------------------- |
| Provision made but no payment yet | No TDS deduction required |
| Payment/credit made to landlord | Deduct TDS at applicable rate |
| Reversing excess provision | No TDS impact |

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If rent has been actually paid or credited previously, TDS should have been deducted then.

Would you like help with Tally entry formats or more details on when to deduct TDS on rent?

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