Tds- deducted and gross amount paid

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This query is : Resolved

rgurucharan (Querist)

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)

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)

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)

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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