Tds

This query is : Resolved

szl Agarwal (Querist)
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26 May 2016 Sir,

I think TDS is applicable on payment basis only in case of Salary.

Suppose - Salary for the month of March is paid in June

March

Salary Expenses Account Dr. 10000

To Salary Payable Account 10,000

June

Salary Payable account Dr. 10,000

To TDS Payable 1,000

To Employee/ Bank 9,000

On or Before 07-July

TDS payable Dr. 1,000

To Bank 1,000

Suggest me Wheather i am right or Wrong.???

As TDS will be applicable only at the time of Payment and Liability for TDS will be arised only on Payment Basis.

Rupesh Jain

Rupesh Jain (Expert)
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26 May 2016 yes under 192 tds will collected or deduct on salary when you make payment of salary as per income tax act .

szl Agarwal

szl Agarwal (Querist)
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26 May 2016 Wheather above entry is correct or not??

CA Mithil Munot

CA Mithil Munot (Expert)
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26 May 2016 above entry is correct.

szl Agarwal

szl Agarwal (Querist)
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26 May 2016 But how can the employee get the credit of TDS for the financial Year for which TDS is Charged!!!

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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26 May 2016 Salary has to be booked on accrual basis, so expenses to be booked in March for same if Tds is applicable same to be deducted on March month. Not on payment basis.

Above entry is wrong as per tds is applicable either booked entry or payment entry whichever is earlier.

szl Agarwal

szl Agarwal (Querist)
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26 May 2016 If payment is made in june then obviously i have to pay interest from March to June. Then what is the benefit of "Making TDS applicable on payment Basis"

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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26 May 2016 Above case even you make payment on June, To claim expenses you have to make tds provision for March, etds to be filed for 4 th quarter by 15th of May. Otherwise 234E 200 per day or tds amount of quarter whichever is less to be paid additional to interest.