The following are entries:
01/02/13 X Dr. Rs. 50,000
To Bank Rs. 50,000
15/03/13 Maint. Charges Dr. Rs. 1,00,000
To X Rs. 1,00,000
How much is TDS amount and when it should be booked? How much is interest on TDS for delay in deduction as on 31st march, 2013
TDS is deducted at the time of making payment.
Here in your case TDS will be deducted on Rs. 50,000 subject to types of services rendered by him
say He commission or brokerage paid than TDS will be 10% but in case of contractor it will be 2%.
TDS should be deposited on before 7th of the next month in which TDS is deducted. for example If payment is made in January after deducting TDS such TDS must be deposited on or before 7th Feb.
When the Income or amount leable to TDS is credited or deducted in March then due date for deposit of TDS will be 30th April
on 31-3-2013, deduct tds on full amount of rs.100000 under section 94C.
interest for delay in deduction of tds is 1% per month. charge 2% on rs. 50000 only i.e. for two months.
Thanks Guddi
@ Samrendra
I'm talking about interest on delayed deduction @ 1%
In this case, tds should have been deducted on advance payment of Rs. 50,000 in february, which if deducted in the month of march, then i have to pay interest @ 1% for 2 months ie., 01/02/13 to 01/03/13 & 01/03/13 to 15/03/13 part month.
Account Entry should be:
TDS Payable A/c (Duties & Taxes - B/S) Dr......
Interest on Late Payment of TDS A/c (Indirect Exp - P & L) Dr......
To Bank A/c (Current Assets - B/S)
yes. you should provide for interest on delayed deduction for two mnths and you were required to deduct tds at the time of payment or credit w.e. is earlier. in addition to this, if you will the tds payment now you also need to provide for interest on delayed payment @ 1.5 % p.m. from the date of deduction.
I feel the entry should be
TDS Expense Debit (and not TDS payable)
Interest on Late TDS debit
To Cash/Bank
Question
In this case X's TDS was not deducted by the company. X is not at any fault here.
Will any questions be asked of by Income Tax Department from X when X files his Income Tax Return.
Will X still need to take Form 16A from the company?
Can X still claim the TDS deposited by the company (albeit late) at the time of falling his return?
Thanks
CAclubindia
