Vipul Acharya (Account Officer) 24 May 2020
I received a Invoice Dated :- 18.05.20
of AMC contract period is from Feb-20 to Jul-20
So i have to make provision in FY 2019-20 proportionately but in this whether to be deducted in the m/o Mar-20 or in May-20
If to be deducted whether Proportionately or in full
Pradeep Gupta (Accounts Manager) 25 May 2020
You need to deduct TDS on full amount excluding tax.
Further, Expenses will be booked for 2 month i.e. Feb & Mar and remaining 4 months expenses will be debited to prepaid expenses so that it can be expensed off in the next year which it pertains to.
CA ABHAY GUPTA (Practice) 25 May 2020
A prepaid expense is a type of asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future.
in the given case payment is not made in advance thus it is not a case of prepaid expense.
secondly the bill dated May, 2020 since expenses belongs to previous year also thus expense pertaining to feb and March need to be booked in that particular month else expenses will not be allowed. TDS need to be deducted proportionally as expenses booked meaning tds for the month of feb and march to be deducted in feb and march and to be paid.