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Urgent help needed for tds

Sunish (Freelance) (168 Points)

08 September 2013

Iam currently finanalising the accounts of a CO. But the DATA send by the Co staff has certain probs..

An item of " Remuneration Paid to Directors" is not provided after deductiong TDS..

Currently The entry Stands :

SALARY TO DIRECTORS... DR 720000

TO BANK 440000

TO EXPENSE PAYABLE 280000

Now after learning Tds has to be deducted from the above iam in a big dilemma as to how to incorporate a Tds Payable account into the accounts..

UR RESPONSEWILL BE HIGHLY APPRECIATED

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12 Replies

Nandan (Accountant) (40 Points)
Replied 08 September 2013

Must make tds but no problems as the expense can be claimed as deduction even though tds not made

Shankar Kumar (Accounts & Finance) (22 Points)
Replied 08 September 2013

Tds trf to director ac. Provide on month on which it is payable. Pay tds with intt.

CA. Mohit Sharma (Job at CA Firm) (46 Points)
Replied 08 September 2013

section 40(a)(ia) states only about intrest,rent,commission,royalty and professionl fees. So evan if you have not deducted tds on salary deduction can be taken. H/e penalty u/s 221 can be imposed.

Lipu Biswal (Accountant) (21 Points)
Replied 08 September 2013

First deduct tds with interest.

amit popli (Accounts Manager) (430 Points)
Replied 09 September 2013

If Tds is not deducted then submit the self assesssment tax in the name of directors or you can also submit the TDS in the name of directors and amend the tds return. As per amendment made in the TDS , if Director has submit self assessment tax on Rs 720000. your company can claim the deduction of salary of directors . As per the amendment your company is not treated as assessee in default if the receiver has submit the self assessment tax . Your company have to submit the interest up to the date of filing of return by directors

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amit popli (Accounts Manager) (430 Points)
Replied 09 September 2013

Tds is not deducted then submit the self assesssment tax in the name of directors or you can also submit the TDS in the name of directors and amend the tds return. As per amendment made in the TDS , if Director has submit self assessment tax on Rs 720000. your company can claim the deduction of salary of directors . As per the amendment your company is not treated as assessee in default if the receiver has submit the self assessment tax . Your company have to submit the interest up to the date of filing of return by directors

Rohit Shetty (CA Final) (35 Points)
Replied 09 September 2013

Actual entry should have been. Salary to Dir....dr. To director salary payable account To Tds To expense payable account. And on payment it will be Director salary payable account....dr To bank Tds a/c .....dr To bank. Now what you could do is debit the director salary payable account with the tds deducticble and adjust the amount with future salary payable ammount. So entry for tds will be Director salary payable account....dr To tds

sujith revisankar (articled assistant) (34 Points)
Replied 09 September 2013

Since the accounts are at the stage of finalising it would be better not to make the rectification entry. If such an entry is made now, it would amount to tax deducted but not paid, which is a serious issue than non-deduction. The expense can be claimed even without tax deduction. Also you must follow the procedure that Mr. Amit Popli has stated here to avoid the company from being treated as an assesse in default. But he has forgotten to add that the company will have to get a certificate from a Chartered Accountant in this regard.

1 Like

Sunish (Freelance) (168 Points)
Replied 09 September 2013

thanx for the response friends.

@ amit popli - thats a new info , thanx though

@ rohit shetty - i could not comprehend ur entries..why is ther a salary payable and expense payble in your first entry . i have opened the Expense payable for salary payable nly.

@ sujith - thanx.

There will be interest on late deduction as well as late payment here isnt it?

sujith revisankar (articled assistant) (34 Points)
Replied 10 September 2013

No, if you follow Mr. Popli's recommendations there will be only interest for late deduction @ 1% from the date on which tax was deductible to the date on which the payee furnishes his return.

Achu vijay (Articled Assistant) (21 Points)
Replied 10 September 2013

Compute the TDS using slab rate u/s 192 and make the payable entry for the year end as,

"SALARY TO DIRECTORS Dr

To TDS ON SALARY PAYABLE"

The aforesaid amount of TDS payable also included in the salary to directors.

Sunish (Freelance) (168 Points)
Replied 11 September 2013

Originally posted by : Achu vijay

Compute the TDS using slab rate u/s 192 and make the payable entry for the year end as,

"SALARY TO DIRECTORS Dr

To TDS ON SALARY PAYABLE"

The aforesaid amount of TDS payable also included in the salary to directors.

WOULDNT THIS ENTRY INCREASE OUR ORIGINAL SALARY AMOUNT( THE DR.) THEREFORE TDS WILL BE AGAIN DIFFERENT FROM WHAT IS SHOUD BE?