Tds journal entry

Dear Sanjay,

Debit the party and credit the liability A/c to the extent of TDS. Interest portion the deductor has to bear and hence it will an expense for the deductor.

As far as the interest is concerned it will be 1% on the amount of tax for every month or part of month from the date on which tax was deductible to the date on which tax is deducted.

Prashanth.

1) Journal entry

Debit : Car/Transportation Account Code

Credit : Liability A/c

2) When you pay TDS for entry kept in Liability A/c

Debit : Liabitlity A/c

Credit : Bank A/c

3)

Debit : Interest of Late Paymen

Credit : bank A.c

Rate of Interest is 1 % for delay in deposit for every month

say if delay is 1 month then its one month

if delay is 1 month 4 days then two month have to be considered.......