Entries in the seller books: GST 18%, TDS 10%
Dr. Debtors 47200
Cr. Income 40000
Cr. output GST 7200
after cash settlement
Dr. Bank 43200
Dr. TDS receivables 4000
Cr. Debtors 47200
When this 4000 is lower than Tax+Cess amount, difference is tax payable and when 4000 is more than Tax+Cess amount, the difference is refund.
Now, is the same principle applicable for TCS receivables in the books of buyer?
Regards
I can't understand Your Question...
You are confused with TDS & TCS....
First understand TDS & TCS and It's Deafferents...
Please go through the following link. After that ask Your question...
https://cleartax.in/s/difference-between-tds-and-tcs
Simple! I hope you understand my point in double entries
What happens is
Dr. Debtors (Assets)
Dr. TDS receivable (Assets)
Cr. Sales (Income)
leave GST to avoid confusion
During year end PBT is 1 lakh and 10% tax rate and imagine Cess is 1000 somehow
Dr. Tax expense 10000 (Income)
Dr. Cess 1000 (Income)
Cr. TDS receivable 4000 (Income)
Cr. Tax payable (11k-4k) (Liability)
if the book profits are like very low this year cause you made too many purchases and expenses, tax expense will be low
Dr. Tax expense 2000 (Income)
Dr. Cess 500 (Income)
Cr. TDS Receivable 4000 (Income)
Cr. Tax refund (4k-2.5k) (Income)
This above is in the books of seller.
Now TCS receivables occur in the same way because its a liability in the books of seller and current asset to buyer. Lets modify this to books of Buyer who purchased car for 11.00 lakhs @ 1% TCS
Dr. Car 11L (Asset)
Dr. TCS receivable 11k (Asset)
Cr. Bank 11.11L (Asset)
during the year end
Dr. Tax+Cess 20L (Income)
Cr. TCS Receivable 11.11L (Income)
Cr. Tax payable (Liability)
Both the mechanisms is the same!!!
CAclubindia
