Tds- deducted and gross amount paid

This query is : Resolved

rgurucharan (Querist)
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31 December 2013 Dear sir,

My client has paid Rs. 35,000 towards legal fees to a lawyer. TDS @10% has been deducted at Rs. 3,500. But the client has made payment of Rs. 35,000 at gross amount only.

Now what is the entry & action i have to take to rectify the above mistake.

please guide me.

With regards,

R. Gurucharan.

sahil jain

sahil jain (Expert)
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31 December 2013 Hi,

Now that your client has paid an amount of Rs.35,000 that means it is 90% of the total amount since 10% needed to be deducted as TDS. Therefore now the TDS liability comes out to be Rs. 3,889(35,000/90%-35,000). Hence an extra amount of Rs. 389 needs to be deposited.

rgurucharan

rgurucharan (Querist)
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02 January 2014 Dear sir,

i am confused to pass the journal entry.

I donot want the extra amount of Rs. 389 to be be paid as late payment of tds. To avoid interest and penalty.

How can i do the same? Please show the journal entry to be passed.

With regards,

R. Gurucharan.

sahil jain

sahil jain (Expert)
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02 January 2014 Hi,

I think the only remedy left for you is to show the refund of Rs.3,500 received back from your client being the excess amount paid i.e. Cash a/c dr. 3,500
to Lawyer a/c 3,500

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