TDS on Rent Entry

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

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.

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

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.

TDS on Rent should be deducted on Gross Amount Excluded Service Tax.

& other than Rent TDS should be deducted on Net Amount 

Excluding Section 194I  TDS is deducted on gross amount of the bill including service Tax.

!!! 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..!!

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

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.

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

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.]