Regards 194 a

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pankaj

Sr. Accountant

75 Points Posted on 12 May 2016

Dear All, I deposit a FD in bank suppose 100000 rupees then I get return 120000 rupees now bank deduct tds 10% that will be 2000/- then first I pass this entry for FD , FD account debit 100000/- to bank 100000/- after maturity of the fd I passed this entry bank account dr 118000 tds receivable dr 2000 Interest Income (misc) 20000/- FD account 120000/- please guide me if I am wrong .

Replies (4)

CA ABHAY GUPTA

Practice

1639 Points Posted on 12 May 2016

Dr Bank 118000
Dr Tds Receivable 2000
Cr FDR 100000
Cr Interest earn on FDR 20000

pankaj

Sr. Accountant

75 Points Posted on 12 May 2016

Thank you very much sir have a great day :)

pankaj

Sr. Accountant

75 Points Posted on 19 May 2016

Dear Mr. Gupta,

Greeting of the day...!

Considering the above queries ,I would like to put one more case in this .suppose bank deduct 1000/- as prematur withdrawal charges then shall i pass the bellow entry for that .

Bank account dr -118000/-

bank charges dr - 1000/-

Tds receivable dr - 2000/-

Interest Received cr. - 21000/- (As per my evaluation i raise income one thousand for equalization of both dr. and cr. side )

Fixed deposit a/c cr. - 100000/-

Q no 2 regarding tds as per 194 a - IF a premature withdraw happen in middle of the term period then when we received the interest the tds should deduct on total income of interest including premature charges or it will be affect on only net income of interest .

Best Regards,

Pankaj jena .