TDS Deducted

1378 views 4 replies

Ganesh Aggrawal

19 Points Joined March 2007

Sir,

We raise invoice on parties. Party enter in their books after TDS. and paid us after TDS. When we receive the Payment only then we account for TDS.At the end of the year some payment are received after 31st march and we account for TDS after 31st march.In this case party gives us the TDS certificate for more amount and our accounts show less tds recievable.

Now, i want to know is this the right accounting method. How we should do accounting for this difference of TDS.

We are a service providing industry.

Thanks

Ganesh aggrawal

Replies (4)

Som

112 Points Joined March 2007

dear ganesh,
You are following cash basis of accounting and the person deducting the tax are following accrual basis . In the long run it will be better for you if you switch for accrual basis.
But in the present cash you dont have to do anything, you account for as you are doing and for assesment purpose you may have to provide a reco. statement.

Rinit

25 Points Joined March 2007

if u r running a company then following cash basis is not allowed under companies act 1956 sub section 3(b) of section 209

Raj

37 Points Joined March 2007

Hi Ganesh, Most people make TDS entry only after receiving TDS certificate from the other party in order to avoid the pain of rounding off differences and reconciliation work. This is JUST FOR CONVENIENCE and NOT CORRECT. You can follow this also. THE IMPORTANT thing is to HAVE A PROPER CUT-OFF and STICK WITH IT. Let me know if this helps you

Guest

426680 Points Joined August 2012

SIR, WE ARE IN MFG OF DIES &MOULDS please give me the idea ,how to issue TDS certificate on labour charges(finishing)sir we have deducted TDS @ 2.06%,please tell me to how to issue certificate to them, sudhir gk