06 June 2012
if a Company holds a current a/c which gives a sweep everyday to its sister concerns.at the end of the month there is an interest charged on this daily in and out activity of money from parent--to --sister soncern and back again from sister---to --parent A/c . so does the parent Company need to pay the TDS on the Sweep Inerest charged by the bank. this TDS on interest is shown receivable from its sister concern in the books of PArent Company.
06 June 2012
Hi Siddharth, Here the interest paid to bank is on behalf of the child companies. so the parent Co is charging the Child Co for usinf its money. the a/c goes as follows: Parent Co Books: Intercompany receivable A/c CR Bank A/c Dr TDS receivable A/c Dr
Child Co books: Intercompany Payable Dr To bank A/c Cr To TDS on ZBA int Cr
In this case, the child Company is paying the TDS to bank. whereas the Parent company is also paying TDS receivable to bank. Is this correct?
CAclubindia
