TDS on provision of expenses
This query is : Resolved
06 May 2009
Is TDS applicable on provision made for expenses? If yes, then how would we treat the bill at the time of posting?
taxindiaconnect
(Expert)
06 May 2009
The TDS is applicable is the expenditure falls in any of trhe category mentioend in chapter XVII of IT Acrt. In that case the follwing accounting enrty would be passed in the books
Expendiure Account Dr
To provision for expenditure A/c
To TDS payable account.
At the time of payment the entries would be as following -
Provision for Exp a/c Dr.
To Vendor A/c
Vendor A/c Dr
To bank
For payment of TDS on due date the entry would be
TDS Payable Dr.
To bank.
Hope this clarifies your query.
Expendiure Account Dr
To provision for expenditure A/c
To TDS payable account.
At the time of payment the entries would be as following -
Provision for Exp a/c Dr.
To Vendor A/c
Vendor A/c Dr
To bank
For payment of TDS on due date the entry would be
TDS Payable Dr.
To bank.
Hope this clarifies your query.
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