Tds entry

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2011 We have raised a bill on our party for Rs.100000. The party has made a payment of Rs.99000 after deducting 2% tax on that ie. Rs.1980 TDS. But they have issued us a TDS certificate of Rs.2000. How do we reconcile the tds account.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

04 August 2011 Show TDS deducted as Rs 2000 and make the adjustment of balance amount by way of cash entry.

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2011 No convinced. Pls give the necessary journal entry

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

05 August 2011 You are saying the party made payment of Rs 99000/- after deducting TDS Rs 1980/- which is wrong. It will be Rs 98020/-. Now they issued TDS Cert of Rs 2000/-.
Pass entry like this--

Party A/c Dr ...100000
To Bill A/c (Income Receivable) Rs100000

TDS Receivable A/c Dr....Rs 2000
To Party A/c Rs 2000

Bank A/c Dr...Rs 98020
To Party A/c Rs 98020

Therefor you received Rs 20 more.

Party A/c Dr.....Rs 20
To Cash A/c Rs 20

(being excess payment received now adjusted by cash payment.)

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2011 No there is a balance lying in the party account for Rs.1000. Then what entry will be passed.