X, a firm purchased furniture from Z for FY 2009-10 for 6000000/- at the end of the year z isssued form 16A on the head of discount u/s 194c .
under what head this discount is shown?
what is the accounting treatment and how it is passed?
z will deducted tds under the discount head?
if so, he can deduct at what rate?
is this discount treated as income and shon in profit and loss account or not?
what is the value of furniture at the end of year after passing of entry for discount?
AS PER MY OPINION
THERE IS NO BOUNDATION TO DEDUCT TDS ON DISCOUNT, EVEN THERE IS NO ANY PROVISION TO DEDUCT TDS
& IF HE HAD DEDUCT TDS THAN THE RATE IS TO BE 10%
AND FOR ACCOUNTING TREATMENT
THE PURCHASE AMOUNT SHOULD BE AMOUNT PAID PLUS DISCOUNT RECD
AND DISCOUNTED AMOUNT WILL BE SHOWN AS INDIRECT INCOME
& TDS SHOWN AS CURRENT ASSETS
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