Hello,
Can any one help me what will be entry pass the follwing?
Mr,X Recived Inovice of Rent from MrZ Rs 110000 on ST10.30%
Pankaj Arora
(Learner)
(3134 Points)
Replied 17 March 2011
I assume invoice amount 110000 excluding from service tax..
Invoice gross amount will be 121330.00
RENT A/C DR. 121330
TDS CR. 11000.00
MR.XYZ CR. 110330.00
MR. XYZ DR. 110330.00
BANK A/C CR. 110330.00
Athmaram
(Articled Assistant)
(170 Points)
Replied 18 March 2011
Pankaj Ji is correct
But if Mr.X is taking credit of Service Tax then the entry ill be as follows,
RENT A/C DR. 110000.00
SERVICE TAX A/C DR. 11330.00
TDS CR. 11000.00
MR.XYZ CR. 110330.00
MR. XYZ DR. 110330.00
BANK A/C CR. 110330.00
THANKS & REGARDS
RAM.
TUSHAR MADAAN
(ARTICLE ASSISTANT)
(29 Points)
Replied 18 March 2011
i think, TDS should be deducted on gross amount. But mr. Athmaram have taken on net amount excluding of service tax. so, the tds will be deducted on Gross amount. Which is Rs. 121330/-. the entry is.\
Rent A/c Dr. 110000
service tax a/c Dr. 11330
Tds. Cr. 1233
mr. xyz Cr. 120097
Athmaram
(Articled Assistant)
(170 Points)
Replied 18 March 2011
Dear Mr Tushar,
As per Income Tax Act for TDS on Rent need not be deducted on Service Tax Component.
As per Circular No.4/2008, Dated 28-04-2008.
Please Find The Attachment.
Thanks & Regards
Ram.
PRADEEP CHAND SHARMA
(Accounts Officer)
(141 Points)
Replied 18 March 2011
TDS on Rent should be deducted on Gross Amount Excluded Service Tax.
& other than Rent TDS should be deducted on Net Amount
Dhiren Beura
(CWA,CA FINAL)
(50 Points)
Replied 18 March 2011
Excluding Section 194I TDS is deducted on gross amount of the bill including service Tax.
Raunak
(CA Final)
(227 Points)
Replied 19 March 2011
!!! ru kiddin me?? this was d same question asked this nov 2010 pcc exam.
I wrote it wrong :( so tats y i remember it quite well now...
Mr.Tushar s answer is right..!!
Dhiren Beura
(CWA,CA FINAL)
(50 Points)
Replied 21 March 2011
| Originally posted by : Raunak | ||
 |
MR. Athmaram is right.Please refer the circular . It is specifically mentioned in the Direct Tax book written by G.Sekar
|
 |
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 23 March 2011
I feel this will be more appropreate entry.
When Bill is raised
Rent a/c Dr 110000
Service tax credit unpaid 11330
To TDS on Rent 11000
To Mr Z A/c 110330
When Payment is Made
Mr Z A/C 110330
Service tax Credit Paid A/c 11330
To Service Tax credit unPaid A/c 11330
To Bank A/C 110330
Thanks
R Shriram
CA Saiyum khan
(Practicing CA)
(685 Points)
Replied 24 March 2011
In my opinion if the service tax credit is being taken then TDS is not required to be deducted on ST component as that component shall not be claimed as expense.
But in the cases where service tax credit is not taken and is part of the total expense then TDS on gross amount should be deducted to be on safer side.
pradeep kumar
(Accountant)
(8 Points)
Replied 20 June 2021
Rent Journal Entry in tally
Office Rent A /c 15000
Vibhash Da 13500
TDS On Office Rent 1500
Made payment in Rent
Vibhash Das Dr........................... 13500
TDS On Office Rent Cr ................1500
Bank A/c ......................Cr .................15000
Ayush
(Executive )
(6232 Points)
Replied 23 December 2023
The TDS is deducted at a rate of 10% on the rent, but it is applicable only if the annual rent exceeds the threshold of Rs 2,40,000.
Entry for Rent Paid:
Rent.....Dr. [This increases the expense account for rent, reflecting the payment made]
To Bank [This shows the reduction in the bank balance due to the payment of rent]
To TDS Payable [This is a liability account representing the TDS but not yet paid]
Entry for TDS Payable (when paid)
TDS Payable.....Dr [This decreases the liability account, indicating the payment of TDS to the government.]
To Bank [This reflects the reduction in the bank balance due to the TDS payment.]
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