Tds & accounting for building under progress

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Shan (Querist)

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)

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

Message likes : 1 times

Shan

Shan (Querist)

19 March 2012 Thank you very very much Sir.....
Regards Shan...

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