TDS 194R questions

To account for the gold coin provision, TDS deduction, and release to the customer, you'll need to make the following journal entries:

Journal Entries: 1. *Provision for Gold Coin (FY 2023-24)*: - Debit: Provision for Gold Coin (Expense) - ₹10,000 - Credit: Provision for Gold Coin (Liability) - ₹10,000

2. *TDS Deduction (FY 2024-25)*: - Debit: TDS Payable (Liability) - ₹1,000 (10% of ₹10,000) - Credit: Provision for Gold Coin (Liability) - ₹1,000

3. *Release of Gold Coin to Customer (FY 2024-25)*: - Debit: Provision for Gold Coin (Liability) - ₹9,000 - Credit: Customer's Account (Asset) - ₹9,000

4. *Purchase of Gold Coin from XYZ Ltd (FY 2024-25)*: - Debit: Gold Coin (Asset) - ₹9,000 - Credit: XYZ Ltd (Liability) - ₹9,000

Overall Accounting Entry: The overall accounting entry would be: - Debit: Provision for Gold Coin (Expense) - ₹10,000 (FY 2023-24) - Debit: TDS Payable (Liability) - ₹1,000 (FY 2024-25) - Debit: Gold Coin (Asset) - ₹9,000 (FY 2024-25) - Credit: Provision for Gold Coin (Liability) - ₹10,000 (FY 2023-24) - Credit: Customer's Account (Asset) - ₹9,000 (FY 2024-25) - Credit: XYZ Ltd (Liability) - ₹9,000 (FY 2024-25)

Is Tds payable debit entry or credit entry??

As per my knowledge TDS payable credit entry

Section 194R covers TDS at 10% when any business provides a benefit or perquisite to another person arising from their business or profession. The threshold is Rs 20,000 per financial year per recipient.

Common situations where it applies:
- Free samples sent to doctors or distributors (value above Rs 20,000 in the year)
- Sponsored travel or accommodation for dealer conferences
- Gifts or vouchers given to distributors, agents, or business contacts
- Even capital assets given as freebies count

Points that often confuse:
- GST is included: TDS is on the value inclusive of GST if the benefit has a GST component. CBDT Circular 18/2022 clarified this explicitly.
- Non-monetary benefits: if the benefit cannot be withheld at source (e.g. a free trip already taken), you deduct TDS from the next cash payment to the same recipient
- Employees are excluded: if the benefit is given to an employee, it falls under Section 17(2) as perquisite, not 194R

After deduction, issue Form 16A to the recipient. They claim TDS credit in their ITR.

For the complete scope with examples on dealer gifts, pharma samples, and CBDT circulars, this [Section 194R TDS guide](https://taxgarden.in/blog/tds-on-benefits-perquisites-section-194r-393-guide-india-fy-2026-27) covers the practical situations in detail.