Tds

We basically deal with a labour tds. we deduct the TDS @ 2% (TDS on Contract) when the bill is received from A labour as under whose bill amt. is Rs.20000/- Less 2% TDS deducted Rs.400/-  we post fllg. entry.

Labour Chgs. A/c. Dr.  Rs. 20000/-

TDS A/c.                 Cr.  Rs.      400/-

A labour                 Cr   Rs. 16000/-

I want to know whether the above transactions is correct as we have to debit the A labour while making the Pymt. and how to treat the TDS entry with the above. plz. let me know

Replies (7)

Yes. The above Journal Entry is correct.

 

Regards,

Devendra k

The rate of TDS is 1% u/s 194 C for non corporate assessee...

By principle the entry is correct. (not by value or arithmatics)

Above entry is correct , not value , if non corporate assesee. and while making payment to A Labour

 

A labour    DR

to bank or cash

 

 

this entry is also right however you can pass two entries at the same time to make somebody more clear.

labour charges dr

   to Labourer

 

and Labourer a/c dr

         to TDS

 

 

 

 

Yes the above entry is correct.

194 C ( consideration for contract)

who is liable to deduct- Any assessee otherthan individual and huf whose accounts is not required to be audited u/s 4AB of income tax act.,

who is liable to pay- Indian resident.

Rate- 1% incase of individual or huf, 2% in case of other assessee

Exemption- single payment Rs.30000, agreegate payment Rs.75000

when to be deducted- at the time of payment or at the time of credit which ever is earlier.

 when to be deposited- (i) with in 7 days from the last date of month in which it is deducted

                                           (ii) if it is credited on the last date of year then with in 30 days from the last date of the year

TDS certificate- form no 16A

Deduction at nil rate or at a reduce rate -on submission of a declaration in from no 13 to A.O.

( If the pan number is not Quoted then the rate will be 20%)

SEC44ABof income tax act

Above entry is correct , not value , if non corporate assesee and while making payment to A Labour it is 1%

1)Labour Chgs. A/c. Dr.  Rs. 20000/-

              TDS A/c.                 Cr.  Rs.      400/-(if 2%)

               A labour                 Cr   Rs. 19600/-

2)A labour    DR   19600

           to bank or cash   19600

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