344 Points
Posted on 15 October 2017
Plz suggest correct journal entry on TDS on Interest from Bank FD
TDS on bank FD interest is recorded by recognizing full interest income and showing deducted TDS as receivable under current assets. Discussions cover yearly accrual entries, maturity entries, and treatment for multi year fixed deposits.
"Do the Right Thing...!!!"
128147 Points
Posted on 15 October 2017
Dr. FD Account - XXXX
Cr. FD interest Received A/c - XXXX
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
FD A/c. Dr 90
TDS Receivable Dr 10
To Accured Int./ Int. Income 100
Accounts Executive
220 Points
Posted on 15 October 2017
dear ashiwini sir
I can't understand your entry
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
As Nitin Ji has asked entry for TDS on FD. As bank normally deduct TDS @ 10% on FD Interest.
Assume Interest Provided by Bank Rs.100 than TDS will be Rs 10 (10% of 100)
Vishresh Ji now check my entry
344 Points
Posted on 15 October 2017
Sir, thanks, but than how I get full value on maturity. There will be less amount due to tds. Plz clear
"Do the Right Thing...!!!"
128147 Points
Posted on 15 October 2017
At the time of maturity :
Dr. FD Account - XXXX
Dr. FD Interest - xxxx
Dr. TDS* Receivable - XXXX
Cr. Bank A/c - XXXX
344 Points
Posted on 15 October 2017
Dear Sir, In every year we are taking credit of TDS. Than suggest
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
FD maturity value will be less for TDS deducted
For Example
FD Face Value 100000
Interest 50000
Maturity Value Printed on FD 150000
Total TDS Deducted on Interest 5000
Now the maturity value i.e the amount received on maturity is 145000
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
Now the entry on maturity will be
Bank A/c. DR 145000
To FD 145000
Note: It is assumed that interest on FD has already been booked as per the entry given above
"Do the Right Thing...!!!"
128147 Points
Posted on 15 October 2017
Dear Ashiwini Ballodia.,
Explain again. If the FD is 3years then how to handle this. Also TDS ll be deductible on Every year or at the time of maturity...
So, Once again you ll be give your view....!
344 Points
Posted on 15 October 2017
Yes Sir, FD is of 5 years, accured interest book every year, tds deducted every year, how to show and what will be the treatment
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
Let's take the above example with the Period of FD is 5 Years
Entry on Year 0
FD a/c Dr 100000
To Bank. 100000
Entry on Year 1 to Year 4
FD A/c. Dr 9000
TDS Receivable Dr 1000
To Accured Int./ Int. Income 10000
Entry on Year 5
FD A/c. Dr 9000
TDS Receivable Dr 1000
To Accured Int./ Int. Income 10000
Bank A/c. DR 145000
To FD 145000
Managing Partner at TAXounting
8742 Points
Posted on 15 October 2017
Or entry for Entry on Year 5
Bank a/c. Dr 145000
TDS Receivable Dr 1000
To Accured Int./ Int. Income 10000
To FD 136000
480 Points
Posted on 27 June 2018
will be the entry interest credit under indirect income???
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