Tds deducted by deductor

This query is : Resolved

meenakshi (Querist)
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23 July 2012 Hi,

A service provider raised invoice to its client for 75,004 with 68,000 as service amount and 7004 as service tax amount. The client made payment (67,504)after deducting TDS @ 10%. The TDS was deducted on amount including Service tax amount. It would be great if any of you could provide the journal entries for recording the above in the books of the deductee.

Thanks in advance

Yogesh Agarwal

Yogesh Agarwal (Expert)
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24 July 2012 For booking the bill
(assuming Service Tax credit is not available)

Expenses A/c..........Dr.75004
to Party A/c 75004

On making the payment

Party A/c.............Dr 75004
to TDS Payable 7500
to Bank A/c 67504

Suresh Mittal

Suresh Mittal (Expert)
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24 July 2012 First, pls note that in case of renting of immovable property, TDS should be deducted on basic rent and not on service tax part.
Mr. Yogesh has given the entries in books of service receiver. Here are the entries in the books of SP:-
(on raising invoice)
Party A/c Dr. 75004.00
To Rent Received Cr. 68000.00
To Service Tax Payable Cr. 7004.00

(on receiving payment)
Bank A/c Dr. 67504.00
TDS A/c Dr. 7500.00
To Party A/c Cr. 75004.00

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