I have a query on the entry of TDS on foreign remittance.
Suppose, i have to pay foreign party a sum of US $ 100. At the time of date of form 15CA, exchange rate is Rs. 50. So after TDS @10%, i have to pay Rs. 4500 to party & Rs. 500 will be TDS payable.
15CA is filed in income tax on the basis of that TDS in CA certificate.If we declare the amount in CA certificate to income tax then the entry of same amount of tds should appear in accounts.
But suppose while making actual remittance after 3-4 days, exchange rate is Rs. 60. Now as per revised calculations, my liability is Rs. 5400 and TDS payable is Rs. 600 /-.
At the date of payment by bank, the difference should be recognized in foreign exchange fluctuations or not?? because we have to show TDS as Rs. 500 only.
12 May 2012
As per me when you booked bill in your accounts, exchange rate on that day should be considered for deduction of T.D.S and while you are making payment, the difference should be either foreign exchange gain or loss.
CAclubindia
