Tds & accounting for building under progress

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Shan (Querist)
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19 March 2012 the contract for constructing the building is fixed at 50 lacs with the contractor, payable in installments. my question is whether the compnay have to deduct tds as n when it pay to contractor n how the accounting entries be booked for the payment.
the payment be capitalise with tds or wat???
plz help.......

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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19 March 2012 1) The Company has to deduct TDS
Entry at the time of payment along with tds Deduction
Work in progress a/c dr
To TDS Payable a/c
To Contractor a/c
at the time of payment made to contractor
Contractor a/c
To cash/bank a/c
at the time of making TDS amount payment to the department i.e. in bank
TDS payable a/c dr
To cash/bank a/c
after completion of the construction the entry would be for transfer to fixed asset
Buildings a/c dr
To Work in progress a/c
2) The payment along with TDS would be capitalise you can understand it with the first entry above.
OM SAI SRI SAI JAI JAI SAI

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Shan

Shan (Querist)
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19 March 2012 Thank you very very much Sir.....
Regards Shan...

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