TDS on provisional entry

It is always advisable to deduct the TDS on the entire bill amount i.e. incl. service tax, to avoid litigation. Further, in case the bill includes out of pocket expenses, TDS is liable to be deducted on it too. Hence its advisable to take separate bill for out of pocket expenses to avoid TDS.

TDS to be deducted on the amount inlcuding the Service Tax amount.

Originally posted by : Rachit
	It is always advisable to deduct the TDS on the entire bill amount i.e. incl. service tax, to avoid litigation. Further, in case the bill includes out of pocket expenses, TDS is liable to be deducted on it too. Hence its advisable to take separate bill for out of pocket expenses to avoid TDS.

But we have not received any bill yet.

The bill will be issued in the next financial year when the audit will be over.

It's implied that the bill is not received; as had you received the bill you would have booked the bill itself rather than providing for it.

Ask your auditors for the bill amount they would be raising on you (incl. ser. tax) and make the necessary provision for the same alongwith TDS effect.

yes it should be deducted on all amount

Book bill amount with service tax on provisional basis. and deduct TDS on Entire Bill u/s. 194J.

TDS is to be deduted on the entire amount 

TDS on provision is made on amount including Service Tax amount.

Reason:  if we made provision for professional charges for the current FY thus we also have to be made provision of ST on that and what sec. 194J says that TDS is to be deducted on Amount including ST.

So, from the above in your case also TDS id to be deducted on 90000.00+ST

Of course, including the service tax as you will make the provision for the entire cost & accordingly, TDS would be deducted on the entire value.

Shall we get the audit fees bill in date of 31st Mar or is it ok if bill is provided in date of April?

Will there be any problem if auditor gives bill in date of April month, as we have deducted TDS in previous financial year?

Expenses pertaining to a particular financial year needs to be provided in that financial year in absence of receipt of the bill.

Bill received in the subsequent financial year needs to appropriated against the relevant provision entry. Entries to be passed in subsequent fin. year :

1) Expense A/c Dr.

        To Party A/c. Credit

2) Provision for expense A/c ..Debit

                  To Expense A/c. ..Credit

Date of the bill would surely be of April or subsequent month but not of March.

Yes TDS is to be deducted on the gross amount including service tax. But only for TDS deduction on Rent, service tax element is not required to be taken i.e. for the purpose of tax deduction on rent paid or payable TDS is to be deducted on (Rent paid or payable - service Tax).

Regards