Tds

In my view TDS is to be deducted on 40000...

Actually we will be  booking our expense for Rs. 38000/- and not for 40000/-.

So, TDS is to be deducted on 38000/-

Agree with Durga Prasad

Law is clear i.e. on  credit or payment, which is net amount Rs.38000/-

TDS should be deducted on Rs 38,000 the amount of credit given by you.

Dear durga Prasad will u specify the nature of debit note..

Anjali Negi....

Generally Debit Note is given in trading of goods/materials, where some goods are damaged or broken and, 

Sometimes supplier raise invoice of more amount and then realises that, he has charged more and gives debit note to the customer or, 

In some cases customer bargains or discounts on the invoice raised by the supplier, where supplier gives a debit note for that amount.