Say royalty is to be paid Rs. 89.6.
TDS grossed up 10.4 Rs.
Total outflow 100 Rs.
So profit and loss a/c will have royalty expense head of Rs. 100 ???
OR
Royalty expense head of Rs. 89.6
and taxes paid expense of Rs. 10.4???( Also will 10.4 be disallowed in tax computation as it is income tax paid )
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Grossing Up of TDS on Non-resident Payments
Replies (3)
Yes in profit and loss a/c Royalty expenses should be shown as 89.6 rupees and TDS amount should be provisioned or tax expenses
Royalty expense will be debited with Rs. 100 and TDS will be credited with Rs. 10.4
| Originally posted by : Puneet Matha | ||
 |
Royalty expense will be debited with Rs. 100 and TDS will be credited with Rs. 10.4 |  |
This is the correct way to show the royalty expenses.
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