Tds accounting treatment

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.

On Accrual of Interest pass following entries in the books

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

Fixed Deposit ........Dr.      18,000 (B/S)   

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

Fixed Deposit Account may not be debited utill it get renew. Therefore, till that time we will have to keep the same in any other account, whatsoever the name of that account may be.

why tds amount added in capital account

I agree with Mr. D C Bansal

i agree with D.C. Bansal Sir..........

SIR D.C. BANSAL I AGREED YOUR PERFECT ENTRY :-)