Tds entry for cashflow statement
This query is : Resolved
Banisetti Naveen Kumar
(Querist)
19 May 2015
hi friends, sir's plz help me in this regard . what is the entry of TDS on income. and how will I treat this entry in cashflow statement.
CA. Sunil Gokhale
(Expert)
28 May 2015
Tax is deducted when income is received:
Bank a/c Dr. (net income recd.)
TDS a/c Dr.
To Income a/c (gross amount)
Under net cash from operating activities show the net income received. Normally, the entire income-tax paid is shown as a deduction from cash from operating activities because information is not available amount the tax on investment income. However, when tax on investment income is known then it should be deducted from the investment income and not from operating income. Tax paid on operating income should be adjusted accordingly if it includes this TDS.
Bank a/c Dr. (net income recd.)
TDS a/c Dr.
To Income a/c (gross amount)
Under net cash from operating activities show the net income received. Normally, the entire income-tax paid is shown as a deduction from cash from operating activities because information is not available amount the tax on investment income. However, when tax on investment income is known then it should be deducted from the investment income and not from operating income. Tax paid on operating income should be adjusted accordingly if it includes this TDS.
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