Help plz. effect for tds deducted by us in final accounts

1) it will be shown on current liability side and cash or bank will be credited on payment.

2)CBDT Circular: CIRCULAR NO. 4/2008, (dated 28.04.2008) Representation / letters have been received in the Board seeking clarification as to whether TDS provisions under Sec. 194- I of the Income-tax Act will be applicable on the gross rental amount payable (inclusive of service tax ) or net rental amount payable (exclusive of service tax ) The matter has been examined by the Board. As per the provisions of 194-I, tax is deductible at source on Income by way rent paid to any resident. Service tax paid by the tenant doesnt partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore, it has been decided that TDS under Sec 194-I of Income-tax Act would be required to be made on the amount of rent paid / payable without including the service tax.

When someone has deducted Tax at source from your inomce, then you need to show it as an Current Asset, as you are eligible to claim credit for this from your total tax liability. In the subsequent eyar when you prepare the accounts the TDS receivable shud be transferred to Capital Account , or if Provision for taxation is being created, then TDS shud be adjsuted against the provision for tax.

When you deduct tax of someone's else then you shud shw the  TDS payable as a Current Liability.  The gross expense will be debited to P&L Account.