TDS and payment Provission in Group Company - Urgent

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 May 2010 Dear Experts,

we have open a new company but has not open any bank for same company. now we have received a 1st bill of expense and have to make a payment for same bill.
can i do this payment by our group company.
example new company is A and Group company is B.

Entry in the Books of B
A Company A/c dr
To Bank A/c

In the Books of A
Expense A/c Dr
To TDS 10 %
To B Company (Credit given to B Company)

is both of entry is ok if wrong please suggest right entry.

Actually i am confusing about the tds where it should be deduct in the books of A or in the books of B.

Please Guide me.

Regards

Ravinder

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

19 May 2010 Dear Mr. Ravinder,

TDS will be deducted in the books of that company by which the bill related i.e In your case Company A.

In the books of A , you should have to book expenses by name of supplier or service provider
i.e
Expense A/c Dr.
To Service provider Mr. Y
To TDS Payable

Now
Service Provider Mr. Y Dr.
To Company B
( Being payment made by Company B on behalf of us)

In the books of Company B

Company A Dr
To Bank A/c

It is advisable to book expenses by the name of service provider,otherwise at the time of filing of TDS return you will confused.

Querist : Anonymous

Querist : Anonymous (Querist)

19 May 2010 Thanks a Lot with good example.

Regards

Ravinder

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