TDS entry of audit fees

audit fee- dr 45000

to audit fee payable - 40500

to tds payable - 4500

As per me, the amont of service tax should also be included while deducting TDS..

tds liabilty is arise on the credit amount,  there is no question whether  credit amount include st or not

But Navin Sir,When The Bill of Audit Fees Will Be Raised By The Auditor, It will consist Service Tax also.

That Means in This Case at 31-03-11 You Deducted less T.D.S(i.e.on Service Tax component) As A Consequence You Deposited Less Tds in F.Y.2010-2011 ???

Plz Correct me !!! Thanx in advance !!! :-)

As per sec 194J TDS on Professional Fees is deductable after including ST amount.

Audit Fees : 45000/-

ST @ 10.3 % :     4635/-

Total              :  49635/-

TDS @ 10 % : 49635.00 @ 10.3% = 4964/-

entry in books :

Audit Fees Dr.            49635

To TDS Payable on Professional       4964

To Audit Fees Payable                        44671

There is two aspect releted to provision of audit fee:-

1. as per companies act, provision must be made realted to any type of expenses on accural basis therefore st shall be included in provision of audit fee.

2. in the preview of income tax, tds shall be deducted on credit amount to party, suppose liability is Rs. 1103 included st and assesee make the provision for rs. 1000 then tds would be deducted on rs. 1000.

Consequence  when bill raised by the Auditor of rs. 1103,

Rs. 103 would be disallowed as prior period item. and liability of tds on rs. 103 will be arised when bill to be entered.

Sir,

but on base of accural basis if we making provision for the Audit fees we also have to make provision of ST for the same in the same year and the same TDS on both to be deducted on the same in the year from which they are actually related.

@ Govind,

you are right, but if comapny domot have make any provision then tds liabilty will not arised.

Mr.Govind & Sir Navin,Could You Tell Me If By Mistake Less Tds Deducted(i.e. on ST component) on 31-03-2011 & wen in future say in July 2011 bill raised by auditor,at that time Tds deducted on ST amonut and also paid..???

Wat will be the implication ??? Whether there will be no problem as the Less tds is paid before Due date of Filing of return ???

Plz reply :-)

yes sir, if company not making the provision then there is no question of TDS arise.

But but the company should hav eto make an provision to show True & Fair Books.

so, as for audit fees related to the previous year and also the ST is related to that year.

  @ sagar

if provision is made without st and tds deducted on provision amount then the question os less tds will not be arised

  @ govind,

provision related to comapnies act and income tax act are different from each other,

suppose comany has make the provision with st and not deducted tds on whole amount . therfore you can not compare the both act,