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Tds debited in pl a/c

lalit khanna (14 Points)

20 March 2016

WHAT IF PARTY DEDUCT OUR TDS AND WE DEBIT THIS TDS TO OUR PL A/C

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10 Replies

Max Payne (employed) (2574 Points)
Replied 20 March 2016

Please debit to TDS account. TDS account (Of TDS deducted by other parties) should be shown as asset in balance sheet. Do not debit to P&L.

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lalit khanna (14 Points)
Replied 20 March 2016

SIR ,MY QUS IS THAT IF WE DEBITED IN PL A/C IN LAST YEAR AND ITR BEING FILLED ,THAN WHAT WE CAN DO ABOUT THIS

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 20 March 2016

You can not claim T.D.S as expense in your profit and loss a/c. Check whether it disallowed while computing I.T. If it is not disallowed then revise return u/s.139(5) if time to file it does not lapse otherwise in current previous year pass journal entry to reverse the same i.e T.D.S Receivable a/c Dr to Profit and Loss a/c. When your return is selected for either 143(3) or 147 then you will be liable to pay Interest u/s.234A,B and C (if applicable) from their respective due dates to Self assessment tax paid u/s.140A paid for next previous year

AtulDoshi (Propritor) (21 Points)
Replied 20 March 2016

It will have to added back while computing total income of the assesses

Max Payne (employed) (2574 Points)
Replied 20 March 2016

Query: why was tds charged to p&l? Pls elaborate. As pointed out above, section 40(a)(ii) requires income tax expense to be added back if it is debited in p&l.

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Janhavi (Sr. Accountant) (21 Points)
Replied 20 March 2016

First thing TDS is not an expense. If deductor deduct TDS, it becones deductor's liability and he has to pay it within due date of payment. And TDS which was deducted becomes deductee's asset,he can claim credit of it while filing IT return subject to deductor must file his TDS return and it should reflect in deductee's 26 AS statement.

Shivaprasad Rao (Article Assistant) (97 Points)
Replied 20 March 2016

just show tds under current assets then set off against tax payable even if you show this in pl , it'll be disallowed

Shivaprasad Rao (Article Assistant) (97 Points)
Replied 20 March 2016

just show tds under current assets then set off against tax payable even if you show this in pl , it'll be disallowed

ashish (article) (151 Points)
Replied 20 March 2016

1. If while filling ITR in previous year, you have correctly done the treatment in ITR i.e. disallowed income tax debited to p&l, then in current year you need to just do transfer entry i.e. transferring it to balance sheet and accordingly adjust the capital account/reserve and surplus (in case of company) by treating it as prior period item (AS 5)................................ 2... If not, then there is two treatment possible. Firstly, you think that you will handle the consequences If happen, then just ignore the treatment and in future do right treatment by charging it as assets... Secondly, if you want to avoid any kind of possible litigation, then just disclose to your jurisdiction A.O/revise return(if possible) and pay tax accordingly on difference figure (if payable)