TDS

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This discussion addresses a common tax deduction error where TDS was incorrectly applied entirely under Section 194-C instead of the correct split between 194-I and 194-C. The user mistakenly deducted 2% TDS under 194-C on a total taxable value, when a significant portion should have been under 194-I. The advice provided suggests rectifying the TDS paid first, then reversing the incorrect entry by debiting the TDS on Contract (Liability) account and crediting the TDS on Rent account for the amount that should have been under 194-I.

JUNED BAAGWALA

JUNED BAAGWALA (Querist)

27 June 2020 MY TOTAL TDS WAS RS.864291.5 OF WHICH RS. 812477.5/- FOR 194-I AND RS.51814/- FOR 194-C BUT I DEDUCTED TDS WHOLLY UNDER 194-C AT 2% FOR RS.232380/- (WHICH IS WRONGLY DEDUCTED WHOLLY UNDER 194-C ) ON TAXABLE VALUE RS.11618975/- SO HOW TO RECTIFY IT ?
WHAT IS THE RECTIFY JOURNAL ENTRY ?

Eswar Reddy S

Eswar Reddy S (Expert)

27 June 2020 You have to give few more details Is the entire payment to same person? Is the 194I also comes under 2%? If yes then First rectify the Tds paid then reverse the entry to the extent of 194I Tds on Contract (Liability) a/c Dr. 812478 - To Tds on Rent - 812478 The ledger name vary .

JUNED BAAGWALA

JUNED BAAGWALA (Querist)

27 June 2020 yes,the entire payment given to same person.
Total actual tds was RS.864291.5/- OF WHICH RS. 812477.5/- FOR 194-I AND RS.51814/- FOR 194-C
but i deducted tds wrongly in 194-c and if we compare actual tds under 194-c it was deducted at higher
amount than actual tds so how to solve it ?

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