Tds accounting

This query is : Resolved

chetan (Querist)
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28 May 2014 Sir,
20,000/- Rs. of payment made to party in advance for work dated 08/05/14. Bill received of Rs.60000/- dated 17/05/2014. so which amount should consider for tds deduction? 40000/- Or 60000/-?

&
is there any issue about 20000/- Rs. which was paid earlier?

please guide me

Mohan Babu.L

Mohan Babu.L (Expert)
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28 May 2014 Hi Chetan,
From your query it is understood that the work is purely contractual. In this case, TDS has to be deducted on the total invoice value of (Rs. 60,000).
The calculation goes like this,
Invoice value: Rs 60,000
Less: TDS @ 1% / 2% / 20% (as applicability) i.e. say Rs 600
Now Gross value would be Rs 59,400
Less: Advance Rs. 20,000
Net Payment: Rs 39,400

Good Luck...

Guest

Guest (Expert)

28 May 2014 first think i want to say is why u dont have deducted tds on the advance amount

tds liability arises

at the time of advance payment

at the time of booking of expense

which ever is early

please check this because you are making mistake if u hadnt deducted tds on advance amount

and tds will be deducted on 60000

20000 at the time of bill
40000 at the time of booking overall expenses

Mohan Babu.L

Mohan Babu.L (Expert)
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28 May 2014 Ankit Bohra is right.
In this case advance is made on 08th May & the invoice is raised on 17th May, which arises before TDS remittance date. In that case, the above said calculation may be adopted.
But the correct way is to deduct TDS on advance payment itself.
Good Luck..