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Dhanraj (Querist)
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07 September 2009 Dear experts

For A.Y. 2007-08, income tax liability of a proprietor was Rs. 995 and TDS paid was 4041 therefore Rs. 3046 was refundable. Entries for the above amounts were not passed. Please tell what entries should be passed for the above amounts and on which date?? Please help.

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P B Srivathsan

P B Srivathsan (Expert)
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07 September 2009 1. On TDS - on the date of receipt of payment net of tax
TDS AY 2007-08 A/c Dr. 4041
To Sundry Debtor [deducting party] 4041

2. At the end of the financial year
Income Tax A/c Dr. 995
To TDS AY 2007-08 A/c 995
Being tax payable for the year adjusted

3. The balance in Income Tax will be deducted from Capital A/c balance on the balance sheet date.

4. At the time of receipt of refund
Bank Account Dr. 3046
To TDS AY 2007-08 A/c 3046