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Accounting entry for tds

Ajay (Job) (118 Points)

26 March 2010

Dear All,

If we A Ltd provide the security service to B Ltd and service amount for the m/o mar rs.10000/- and in the m/o may we got TDS certificate (i.e. 2% on rs.10,000) and not get the payment yet.

what entry we made in our books of account if we does not get payment yet .

Plz clarify

Regards,

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19 Replies

Ashish Sharma (Service) (1028 Points)
Replied 26 March 2010

TDS Dr. 200

B ltd Cr. 200

ashish gupta ( student) (1922 Points)
Replied 26 March 2010

In the month of March U must have done the following entry

B ltd Dr. 9800

TDS Receivable A/c Dr. 200

To Income from Services 10000

Now Receiving of TDS certificate does not mean that you have got the Tax amount. You have to adjust the TDS amount with your income tax liability for the year and probably make the following entry.

Income tax Dr.

To TDS Receivable A/c

To Bank A/c

G.Ramesh (Accounts Professional) (1089 Points)
Replied 26 March 2010

Agreed with Mr.Gupta

Kaushik Vankadkar (Service) (350 Points)
Replied 26 March 2010

In march when you book the bill

B ltd a/c Dr.9800

TDS a/c Dr. 200

To Income a/c 10000

Even if you got the TDS certificate check with B Ltd that has it filed the TDS return, as nowadays these Income tax people wont give credit of your TDS until the deductee pays it to the govt and properly file it.

Regards

Kaushik

Deepika Agarwal (CA practice) (93 Points)
Replied 26 March 2010

in march end when A Ltd . accrue this service income........ then making this enty....

B Ltd. Dr. 9800

TDS A/C Dr. 200

To Gross income( from service) 10000

and when A LTD. receive payment from B LTD.......... then making this entry.........

Bank A/C Dr. 9800

To B Ltd. 9800

A LTD. can adjust TDS receivable from ur income tax liability after receiving tds certificate that is form 16 A.

Satish shastri (CA final Student) (91 Points)
Replied 26 March 2010

I think in booking of Income the entry will be as follows:-

B Ltd. Dr. 10,000

To Income from Services 10,000

And

TDS or Advance Tax Dr. 200

To B Ltd. 200

anshul bafna (student) (522 Points)
Replied 27 March 2010

CHECK LATEST NOTES AND AMENDMENTS FOR CA FINAL

/forum/ca-final-may-2010-amendments-and-notes-for-all-subjects-75890.asp

kiran (Articles student) (60 Points)
Replied 27 March 2010

In the books of Bltd

Security a/c dr 9800

TDS a/c dr 200

to A Ltd 10000

When payment made

A Ltd a/c Dr 10000

to bank 10000

In the books of A ltd

B Ltd A/c dr 10000

to Income frm service 10000

When Payment received

Bank a/c dr 10000

to Bltd 10000

CA KHAN AURANGZAIB (ERP FINANCIAL CONSULTANT) (85 Points)
Replied 27 March 2010

Dear friend,

As per your query, you have already raised a bill to your customer. it means you have already posted this entry in your books. Therefore there is no requirment to make a new entry except for TDS Certificate which have you received

Then following entry will be made at the time of TDS Certificate received:-

TDS Receivable Accounts DR Rs. 200

To Customer Accounts. Rs. 200.