Accounting treatment

Dear Pradip,

You have mentioned that PSGP LTD (means Co.) is another wing of PEC (proprietor concern) which runs tution centre.

-When Commission is added to Advertising and printing bill raised by creditor. TDS on Commission gets applicable.

-Can Advtg. Contractor raise bills directly to PEC? (as it seems PSGP Ltd is franchise of PEC)

Hai...

your first entry is completly wrong. How come you account in books of PEC when the bill which is not raised to PEC.

You should account the bill only of PSGP's and deduct the TDS from them. you make payment ot PSGP who in turn makes payment to original Creditor.

Mr. shilpa/ dhanabal

PSGP is not runing tution business , it is created only to inflate expenses, and my dear the fact was related to 2008-09, so everything is past, now what I can do,

I want a treatement so that I can establish to the I tax department that though expenses not to be disallowed

THE SUBJECT PERTAINS TO YEAR 2008-09 WAS NOT CLARIFIED BY YOU PEC'S PAYMENT OF TDS (ON COMMISSION ) NOW, IS NOT LIABILITY BUT EXPENSE.

THE TDS PAYMENT AMOUNT SHOULD BE CALCULATED WITH DELAYED INTEREST AMOUNT TAKING TDS ON COMMISSION  AS PEC WAS IN 2008-09 LIABLE TO DEDUCT TDS FROM PAYMENT TO PSGP AS THE SAME ADDED COMMISSION IN ADVT EXPENSES.  

Dear Pradeep

You have already booked all expenses in FY 2008-09 so you have to pass entry for TDS only which is to be paid in current year and entry should be :

Creditor A/c (OR) Expenses A/c   Dr.

         To  TDS Payable A/c

___________________________________

TDS Payable A/c     Dr.

    To Cash/Bank  A/c

_______________________

When the amount realised from Creditor:

Bank/Cash A/c     Dr.

      To Creditor A/c

____________________________