TDS and payment Provission in Group Company - Urgent

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)
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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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