Tds journal entry on FD interest

NITIN SABOO (343 Points)

15 October 2017

Plz suggest correct journal entry on TDS on Interest from Bank FD

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23 Replies

RAJA P M ("Do the Right Thing...!!!") (119983 Points)
Replied 15 October 2017

Dr. FD Account - XXXX
Cr. FD interest Received A/c - XXXX

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Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 15 October 2017

FD A/c. Dr 90
TDS Receivable Dr 10
To Accured Int./ Int. Income 100

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RE.Vishresh (Accounts Executive) (220 Points)
Replied 15 October 2017

dear ashiwini sir

I can't understand your entry

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 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

NITIN SABOO (343 Points)
Replied 15 October 2017

Sir, thanks, but than how I get full value on maturity. There will be less amount due to tds. Plz clear

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RAJA P M ("Do the Right Thing...!!!") (119983 Points)
Replied 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

NITIN SABOO (343 Points)
Replied 15 October 2017

Dear Sir, In every year we are taking credit of TDS. Than suggest

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 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

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 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

RAJA P M ("Do the Right Thing...!!!") (119983 Points)
Replied 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....!

NITIN SABOO (343 Points)
Replied 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

Ashiwini Ballodia (Managing Partner at TAXounting) (8727 Points)
Replied 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

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