Tds journal entry

A/c entries 919 views 2 replies

Respected Experts 

 

Last yr we have not deducted our car hire service providers TDS and now we have to book the TDS @ 2% of whole yr with late fee.

 What would be the journal entry and how to calculate the lee fee etc. 

 

regards

 

Sanjay Rawat

Replies (2)

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.......


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