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AA-42 How to Refund Excess Deduced TDS Amount

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Accounts Officer

717 Points Posted on 21 November 2023

All Respected Members,

Please educate me on below:

Suppose, one of my client deducted more TDS then actual from my payment.

For Example:

They deducted Rs.100 rather than Rs. 70.

Now, he is agreed to return balance excess deducted Rs.30 to us.

How can we record this transactions to balance our debtor account ? please share journal entry.

Thanks in advance for your precious time and efforts to reply this query.

Replies (2)

CA Aditya Lahoti

Chartered Accountant

380 Points Posted on 22 November 2023

To record the transaction and balance your debtor account, you can use the following journal entry:

Debit: Accounts Receivable (Debtor Account) - Rs. 30
Credit: TDS Receivable (Other Current Asset) - Rs. 30

This journal entry will reduce the Accounts Receivable balance by Rs. 30, as your client is returning the excess deducted amount. The TDS Receivable account is credited to reflect the reduction in the TDS liability.

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Accounts Officer

717 Points Posted on 22 November 2023

Dear Aditya,

Thanks for your reply.

you debit the account receivable. account receivable/debtor account increase when debit. so debtor account increase rather than reduce as you mentioned.

Further, suppose client returning amount by cheque so how we record its effect ?