Tds
This query is : Resolved
19 February 2014
dear all,
i case of indivdual why we less tds receivable from capital tell me in detail? and which other things we less from capital in case of indivdual and partner?
19 February 2014
TDS receivable is adjusted against tax liability
19 February 2014
As per Income Tax Act, TDS receivable is to be reduced from the tax liability.
In case of an individual, tax liability is not allowed as deduction since the same is a personal expenses.
Therefore TDS receivable is reduced from capital to set-off the asset.
In case of an individual, tax liability is not allowed as deduction since the same is a personal expenses.
Therefore TDS receivable is reduced from capital to set-off the asset.
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18 March 2014
as per income tax act, tds receivable is to be reduced from the tax liability,
in case of an individual, tax liability is not allowed as deduction since the same is a personal exp.,
therefore TDS receivable is reduced from capital to set-off the assets.
MY QUE. is that if on 31.03.12 tds receviable is 50000 in my bs assets site, and i didn't take tds refund in f.y 12-13 i am individual in this case when will we deduct from capital a/c thanks inadvance
in case of an individual, tax liability is not allowed as deduction since the same is a personal exp.,
therefore TDS receivable is reduced from capital to set-off the assets.
MY QUE. is that if on 31.03.12 tds receviable is 50000 in my bs assets site, and i didn't take tds refund in f.y 12-13 i am individual in this case when will we deduct from capital a/c thanks inadvance
27 July 2025
Got it, you’re asking about the accounting treatment of TDS receivable (like a tax refund or credit) for an individual, especially when it appears as an asset in the Balance Sheet but no refund is claimed in the following year.
### Here’s how it works:
1. **TDS Receivable is an Asset:**
When TDS is deducted on your income, the deducted amount is shown as **TDS receivable (an asset)** in your books.
2. **For Individuals (and Partners):**
* Tax liability and TDS receivable are generally personal matters.
* Since **tax paid or TDS deducted is not an expense** but a **prepaid tax**, it is shown as an asset.
* If the individual does **not file a refund claim or doesn’t adjust TDS receivable against tax payable**, the TDS receivable will remain as an asset in books.
3. **When to Reduce from Capital Account:**
* If the individual **cannot recover the TDS** (e.g., no refund filed and no adjustment), then the amount becomes a **loss or write-off**.
* In such a case, you reduce the **TDS receivable asset** and **reduce capital** (owner’s equity) because it represents a permanent loss to the owner.
* This adjustment usually happens **at the time of finalizing accounts** when it is clear that TDS refund is not going to be claimed.
4. **If TDS Refund is Claimed Later:**
* When you get the refund, you increase bank and decrease TDS receivable.
* No impact on capital account.
---
### In your example:
* TDS receivable ₹50,000 is shown as asset on 31.03.12.
* If you don’t claim refund in FY 12-13 and do not adjust it anywhere else,
* Then at the end of the accounting period when you finalize books, you can **write off this ₹50,000 against capital account** if you accept it as a loss.
---
**Summary:**
| Situation | Accounting Treatment |
| ----------------------------- | ------------------------------------------------------------ |
| TDS refund claimed/adjusted | Reduce TDS receivable, increase bank or reduce tax liability |
| TDS refund NOT claimed (loss) | Write off TDS receivable, reduce capital (owner's equity) |
---
If you want, I can help draft journal entries for both situations. Would you like that?
### Here’s how it works:
1. **TDS Receivable is an Asset:**
When TDS is deducted on your income, the deducted amount is shown as **TDS receivable (an asset)** in your books.
2. **For Individuals (and Partners):**
* Tax liability and TDS receivable are generally personal matters.
* Since **tax paid or TDS deducted is not an expense** but a **prepaid tax**, it is shown as an asset.
* If the individual does **not file a refund claim or doesn’t adjust TDS receivable against tax payable**, the TDS receivable will remain as an asset in books.
3. **When to Reduce from Capital Account:**
* If the individual **cannot recover the TDS** (e.g., no refund filed and no adjustment), then the amount becomes a **loss or write-off**.
* In such a case, you reduce the **TDS receivable asset** and **reduce capital** (owner’s equity) because it represents a permanent loss to the owner.
* This adjustment usually happens **at the time of finalizing accounts** when it is clear that TDS refund is not going to be claimed.
4. **If TDS Refund is Claimed Later:**
* When you get the refund, you increase bank and decrease TDS receivable.
* No impact on capital account.
---
### In your example:
* TDS receivable ₹50,000 is shown as asset on 31.03.12.
* If you don’t claim refund in FY 12-13 and do not adjust it anywhere else,
* Then at the end of the accounting period when you finalize books, you can **write off this ₹50,000 against capital account** if you accept it as a loss.
---
**Summary:**
| Situation | Accounting Treatment |
| ----------------------------- | ------------------------------------------------------------ |
| TDS refund claimed/adjusted | Reduce TDS receivable, increase bank or reduce tax liability |
| TDS refund NOT claimed (loss) | Write off TDS receivable, reduce capital (owner's equity) |
---
If you want, I can help draft journal entries for both situations. Would you like that?
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