TDS return Vs TCS return

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

 

 

Replies (4)
Quick Summary
This discussion explores the differences between Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) returns, particularly focusing on their accounting treatment. It clarifies how TDS receivables are handled in the seller's books and questions whether the same principles apply to TCS receivables for the buyer. The conversation provides examples of journal entries for both scenarios, highlighting how differences between tax amounts and collected/deducted amounts lead to tax payable or refunds.

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!!!

Tcs receivables and tds are seperate acciunt
No need of your extraordinary knowledge

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