banner_ad

TDS Implication on Expensing Off Unrecovered Invoice Amount

Tax queries 513 views 2 replies

Dear Experts,

Company A sells manufacturing scrap to Company B and raises an invoice for Rs. 500, along with TCS of Rs. 5, totaling Rs. 505. The scrap is used in Company B’s power fuelling system. Both companies are unrelated. However, Company B does not make any payment against this invoice. Eventually, Company A writes off the receivable amount as a bad debt.

In such a case, is there any TDS implication for Company A when it expenses off the amount in its books?

Regards,

S Ram

Replies (2)

 

TCS Implications - TCS (Tax Collected at Source) was collected by Company A when raising the invoice for the scrap sale. -

The TCS amount of Rs. 5 was collected and deposited with the government. No TDS Implication for Company A - Since Company A has already collected TCS from Company B, there is no TDS (Tax Deducted at Source) implication for Company A when writing off the receivable amount as a bad debt. - 

Company A would have already accounted for the TCS collected and deposited it with the government. Bad Debt Treatment - When writing off the bad debt, Company A can claim the loss in its books of accounts, but this would not affect the TCS already collected and deposited.

 Additional Considerations - Company A should maintain proper documentation and records of the transaction, including the invoice, TCS collection, and bad debt write-off. -

 Company A may need to follow the applicable accounting standards and tax regulations for bad debt write-offs .

 By understanding the TCS implications and maintaining proper records, Company A can handle the bad debt write-off efficiently.

Dear sir,

Thank you very much. So even the TCS amount not received from the customer can be treated as bad debt and written off right ?

Regards,

S Ram


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 15 May 2026
Audit Assistant / Article Trainee / Intern

SSGS and Associates

Chennai

CA Inter

View Details
Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
14 May 2026
Senior Accounts Executive

Karan Gupta & Co.

New Delhi

Graduate (Any)

View Details
Company
19 May 2026
Accountant

ca kunjan

Mumbai

CA Inter

View Details
Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
24 May 2026
Accounts & Tax Executive

PARAS KHURANA AND CO

New Delhi

B.Com

View Details
Company
14 May 2026
Financial Analyst - Remote Finance Expert

HiringBridge

Ahmedabad

CA

View Details