Tds accounting treatment

1371 views 7 replies

CA Tanay Jindal

CA in practice

163 Points Joined May 2012

I have a confusion in accounting treatment of FD,so plz guide me.
problem is
Eg. F.D=200000
Interest at end of the year=20000
TDS=2000

Then what will be the exact accounting treatment
1=in p&l = 20000 or 18000
2=in b/s = 200000+(20000 or 18000 )
if 18000 then where to show TDS amount of rs 2000

And

if i file my return to take credit of 2000 then how TDS appear in Books of accounts
like if it shown as current assets the why it is shown as current assets coz we have already taken the credit .

plz guide me
thank you in advance

Replies (7)

CA D.C. Bansal

Accounts Head

283 Points Joined November 2007

On Accrual of Interest pass following entries in the books

TDS A/c..........................Dr. 2,000 (B/S)

Accrued Intt of FDR........Dr. 18,000 (B/S)

To Interest on FDR 20,000 (P&L)

For Provision of Taxation pass the following entires:

Provision for Taxation....Dr

To Income Tax Payable

For Adjustment of TDS Pass the following entries:

Income Tax Payable........Dr. 2,000

To TDS A/c 2,000

Alternatively, if it is not an company, You may also transfer the TDS to Capital A/c of Prop/Partners.

Pradip Shaw & Co

Practice

227 Points Joined August 2009