TDS

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Anil Chavan (Querist)

25 April 2009 Dear Sir

Somebody ask me a question given below. I want to know that the answer wrote by me below is correct or not.Please help me out

Question : -

X paid Rs 50000/- to Y on behalf of Z after deduction of TDS. Pass the entries in X, Y, & Z's books

Answer :-

1. Y A/c ------------Dr 45000/
To Bank A/c 45000/-

(Being advance amount paid to Y on behalf of Z after deduction of TDS Rs 5000/-)

2. Z A/c ---------Dr 50000/-
To TDS A/c 5000/-
To Y A/c 45000/-

(Being advance amount transferred from Y A/c to Z A/c for payment made on behalf of Z, TDS deducted Rs 5000/-)

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

25 April 2009 1) The payment entry is correct.

2) TDS entry
Z a/c Dr
To Bank
( Being TDS amount deposited on instruction from Y)

3) On transfer
Z A/c Dr
To Y a/c.

TDS should not appear in the books because it is not the TDS of the paying person.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

26 April 2009 Assuming 50000 is gross amount and TDS rate is 10%

In the books of X
Z A/c ----Dr. ---------------- 45000
To Bank ---------------------------45000

In the books of Y
Bank A/c ----Dr. ---------------- 45000
TDS A/c ----Dr. ---------------- 5000
To ---------------------------Z

In the books of Z
Y A/c ----Dr. ---------------- 50000
To TDS ---------------------------5000
To X--------------------------- 45000

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

26 April 2009 I agree with Manmohan on the citus that deduction of the tax is the responsibility of the payer but the payment has to be done for whom it is deducted and in the present case Z.

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