Accounting of benefit received under 194R

All the deducted TDS gives you tax credits and reduces your tax liability.

So, for example, if you end up paying 30% TDS on a lottery payment of Rs. 300,000 (i.e. you received only Rs. 210,000), and this is your only income in the financial year, when you file your ITR your total tax liability would be zero (Rs. 250,000 being the minimum exempt income). Thus, the excess tax you ended up paying as TDS would be returned to you.

Dr. Bank 40000

Cr. Retained earnings 40000

I think this is what it will be like as per accounting perspective. 

No amount is received in Bank or otherwise. I received a benefit in the form of a business conference trip on which TDS was deducted under 194R.

Now can you suggest the accounting entry for the benefit received and the TDS deducted.

Hello Rashmi

Thank you for your prompt reply. Regarding your above reply, I have a follow up query. How will we square off the XYZ (Co. paying benefit) account in books since no amount is received by us.

When no amount is received for 100 rs lottery win and 10 tds and 5 reimbursement

Dr. Receivables 95

Dr. Tds 5

Cr lottery amount 95

Cr. Reimbursement 5

Forgot your not a lottery winner. Alright! 

Dr. Receivable company (reimbursement)

Cr. Reimbursement amount

Now in the company accounts

Dr. Conference tour expense

Cr. Bank

A benefit is given to you by a client on what amount? Supposing it's like a bonus and tds is applicable on it and added to IT. Before that if you fall under zero bracket, 2,50,000 income by you, you'll not get any reimbursement. But if your like 1 lakh gross pay you'll get the whole benefit reimbursed till 1,50,000 (if this is your benefit cost). What is your pay scale?

In case the Company paid the TDS from their own pocket:

Capital A/c Dr.

TDS receivable A/c Dr.

To income under section 194R

In case the Company collected the necessary cash required towards TDS from you:

Capital A/c Dr.

To income under section 194R

TDS Receivable A/c Dr.

To Bank A/c

(TDS Receivable A/c can be squared off against tax payable a/c)

FOR 194R, WHEN no money in bank is received, for EG.  shopping vouhers received from a  vendor xyz, what will be the accountinG entry  as no bank is involved.