While vouching, today I got confused with the accounting treatment of TDS. Please help me with regards to the following situations :
Situation A :
The client concern has a fixed deposit in the form of Security Deposit with a particular trading entity. The client concern every month receives Interest on the Security Deposit subject to TDS. My questions are :
a) What should be the entry when Interest Income is to be booked at the end of each month by the client entity?
b) What should be the entry when Interest Income after deduction of TDS is actually received in bank after TDS?
Please help me in this regard. It would be great help if somebody explains me the above case with simple numerical example. Thank You.
CAclubindia
