Atul Bajaj (CA) (63 Points)
18 February 2013
Hi,
If a person Pays Rent for Say 3 years amounting to 60,00,000/- and deducts the TDS on that for Rs. 6,00,000/-.
Will the Receiver of rent get TDS credit in the same year.
How the same issue will be dealt with in accounts of Tenant and landlord both?
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 18 February 2013
in the books of Tenant
Advance Rent(or Prepaid Expenses) A/c Dr. 60,00,000
To TDS Payable 6,00,000
To Party A/c 54,00,000
Party A/c Dr. 54,00,000
TO Bank A/c 54,00,000
Then at the end of every year, pass another entry as follows:
Rent A/c Dr. 20,00,000
To Advance Rent A/c 20,00,000
In the books of Landlord
Bank A/c Dr. 54,00,000
TDS Receoverable A/c 6,00,000
TO Advance Rent A/c 60,00,000
Then at the end of every year, pass another entry as follows:
Advance Rent A/c Dr. 20,00,000
To Rent Income A/c 20,00,000
Arvind Khemka
(practicing CA)
(210 Points)
Replied 18 February 2013
yes credit of tds will be received in the same year
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 18 February 2013
Circular 5/2001 dated 2-March-2001 issued by CBDT states that in case where advance rent is spread over more than one financial year and tax is deducted thereon, credit shall be allowed in the same proportion in which such income is offered for taxation for different assessment years based on the single Certificate furnished for tax so deducted on the entire advance rent
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