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About TDS Wrong deduction

Pavan Kumar Gidugu (Accounts Officer) (66 Points)

24 November 2010

Hi Sir,

I have deducted TDS rate 2% insted of 1% & already paid that amount to Tax department.Now I passed this entry to rectify.

TDS Payable a/c xxxxxxx

to ABC a/c xxxxxxx

Kindly give ur views whether it is right or wrong.

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16 Replies

Sharad Saini (Student) (286 Points)
Replied 24 November 2010

i think entry is not ok....

as when u deducted TDS u must have passed this entry

ABC A/c Dr

To TDS Payable A/c

When u paid the tds to deptt u passed:

TDS Payable A/c Dr

To Bank

So TDS Paable a/c has been closed but if now pass any entry then it will again open this a/c and will stay o/s ...

There is no need to pass any entry , excess deduction of tds never creates a problem and u have paid to the deptt also. Issue tds certificate to party of higher amt.......

Pavan Kumar Gidugu (Accounts Officer) (66 Points)
Replied 24 November 2010

but i deducted more amount from ABC a/c.so need to repay

(Guest)

THE CORRECT ENTRY SHOULD BE IF TDS DEDUCTED IS @ 2%

EXPENSE A/C DR 15000

TDS PAYABLE CR 300

ABC A/C CR 14700

NO NEED TO REPAY ISSUE HIM CERTIFICATE OF HIGHER AMOUNT.

shailendra (Accounts Executive ) (128 Points)
Replied 25 November 2010

I agree with both of you

Rajagopalan (Student) (38 Points)
Replied 25 November 2010

See. if you ve deducted on a higher side and remitted to the department. you cannot claim back from department..you are very well going to issue cerfiticate to him for deduction so the deductee need not be worried about the amount. If you ve not remitted to department general accounting entries will do. It all depends whats the basic entry you ve passed for deduction.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 25 November 2010

Just issue him certificate of higher amount (What you have deducted). He would claim this amount on the basis of TDS Certificatge. So there would be no prob..

harsh mehta (....) (36 Points)
Replied 25 November 2010

if further payment to be maden then it will adjust with same otherwise no problem in case of higher deduction of tds.../

CA Mudit Agarwal PGDFM,MCP,IFR (Dy. Manager (Taxation)) (289 Points)
Replied 25 November 2010

U have two options available--------

1. issue the certificate of higher amount as deducted by you

2. adjust the tax deducted if further payment to the same person is to be made...

So dont worry at all......

Pavan Kumar Gidugu (Accounts Officer) (66 Points)
Replied 25 November 2010

thanks for your views sir, i explain how i passed the Entry,

1) Sub,con Expenses a/c 25000/-

to TDS Payable a/c 500/-

to ABC a/c 24500/-

here i deducted 2% insted of 1%.To rectify that mistake i passed the following entry,

2) TDS Payable a/c 250/-

to ABC a/c 250/-

now my question is the above enty is right or wrong,kindly give ur suggestion

(Guest)

Originally posted by : Pavan Kumar Gidugu
	thanks for your views sir, i explain how i passed the Entry, 1) Sub,con Expenses a/c 25000/- to TDS Payable a/c 500/- to ABC a/c 24500/- here i deducted 2% insted of 1%.To rectify that mistake i passed the following entry, 2) TDS Payable a/c 250/- to ABC a/c 250/- now my question is the above enty is right or wrong,kindly give ur suggestion

if you already deposited the 500/- to income tax deptt. you cant debit the Tds payble account with 250/-if you hve not deposited the 500/- rs then only one entry you hve to pass..

your above entry is wrong..