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TDS u/s 192 salary deduction for March

03 August 2020

Sir/Madam
As per section 192 TDS on salary is payment basis(deduction when payment is made). So how do we make entry for March of a financial year as there is no actual payment made before 31/03 of the financial year for March salary.

please give reply ASAP

regards
Anand V

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5 Replies

Chahat Bansal (226 Points)
Replied 03 August 2020

On 31-Mar Salary A/C Dr.
To TDS payable
To Bank

anand achu (16 Points)
Replied 03 August 2020

Sir is it a statutory obligation to make such entry as the section insist on payment basis than due basis

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 03 August 2020

As per section 192 TDS on salary is deducted on payment basis (i.e.deduction when payment is made). But as per the practice followed, it is deducted at time of provision of salary itself.

So, As you have to make provision of March 2020 month Salary in that year 2019-20 itself, So, you are also required to deduct TDS at that time...and file in that year.

If you have file or deduct TDS in next year (2020-21) when payment is made, but employees have to offer that year income in his/her return for F.Y 2019-20 because this salary is taxable on due basis and Claim TDS in that year.
But if employer show that in next year than it's undue hardship to employees to claim refund of same in which year. (Salary offered in 2019-20, but TDS reflected in 2020-21, if deducted on payment basis)

So, to avoid this hardship it is advisable to deduct TDS in that year itself.