Accounting entry under section 194 K - TDS

The person paying dividends on mutual funds should deduct TDS u/s 194K. The deduction is at 10% on the number of dividends, only if a resident shareholder’s total dividend in a financial year exceeds INR 5,000. Section 194K is applicable from 1st April 2020 i.e. FY 2020-21 onwards. If dividends are payable at 6,000 to a person

Retained earning a/c 6000

To Dividends payable a/c 5400

To TDS Payable a/c 600

This will reduce retained earning and accrued TDS payable to tax authorities. When payments are met

By Dividend Payable a/c 5400

By TDS Payable a/c 600

To Banks a/c 6000

This ways retained earnings 6000 and Bank 6000 balance reduces. 

Forgot to mention, it is the bank which does TDS in case, then leave off TDS payables to Bank entry. I did this for presentation and if you want to follow it, I guess you have exclude deferred tax base on this as this tax consequence is not ours probably. So, there is a risk here which is not ours.