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TDS

Md. Aziz Uddin Khan (Financial Accountant) (43 Points)

03 May 2011

Dear

I have been contracted with advertisement company since one year and given them PDC's then i have not deducted the TDS. how can i treat for this.HOw much TDS should i calculate and were it is effect in bank account, P&L account and Balance sheet.

Thx & Rgs

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4 Replies

Sandeep Keswani (Tax Consultant) (1064 Points)
Replied 03 May 2011

Dear Md. Aziz Uddin Khan,

TDS on Advertisement Contract is deductible only if a single transaction exceeds Rs. 30000/- or the aggregate of all transactions during the year exceeds Rs. 75000/-. When the above limit is crossed, TDS is to be made on the entire amount.

Hence you have to check if the above limit was crossed and if yes, when. When the limit is crossed u have to deduct TDS on entire amount including previous payments on whcih TDS was not deducted.

Rate of TDS on Contract: In case the deductee is Individual / HUF - 1%.......in any other case - 2%

If u have already issued PDC without deducting TDS u can request the party to exchange the cheque and then u may issued revised cheque after deducting TDS.

For accounting treatement.....entire amount of bill / payment will be debited to P&L A/c. as Advertisement Exps. Party's account will be credited with amount of Bill minus TDS........TDS willl be shown under Current Liablilites untill is is paid off......

Harpreet (* * * * * *) (1670 Points)
Replied 03 May 2011

agreed with abvoe reply

MD. RAFI (Manager Accounts (future CA)) (670 Points)
Replied 04 February 2013

Originally posted by : Sandeep Keswani
	Dear Md. Aziz Uddin Khan, TDS on Advertisement Contract is deductible only if a single transaction exceeds Rs. 30000/- or the aggregate of all transactions during the year exceeds Rs. 75000/-. When the above limit is crossed, TDS is to be made on the entire amount. Hence you have to check if the above limit was crossed and if yes, when. When the limit is crossed u have to deduct TDS on entire amount including previous payments on whcih TDS was not deducted. Rate of TDS on Contract: In case the deductee is Individual / HUF - 1%.......in any other case - 2% If u have already issued PDC without deducting TDS u can request the party to exchange the cheque and then u may issued revised cheque after deducting TDS. For accounting treatement.....entire amount of bill / payment will be debited to P&L A/c. as Advertisement Exps. Party's account will be credited with amount of Bill minus TDS........TDS willl be shown under Current Liablilites untill is is paid off......