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What Journal entry should be passed in following case?

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Mangal Singh

21 Points Posted on 18 February 2023

Dear all,

We got Income Tax Refund of 28140 for F.Y. 2021-22. We maintain separate tally for the separate bank accounts. TDS deduction made on one bank account is 21905 & TDS deduction made on another one is 4775, rest is interest on Income Tax Refund. But Income Tax Refund of Rs. 28140 has been credited in only one account.

So please guide me what entries should be passed in this case.

Replies (6)

Quick Summary

This discussion addresses how to correctly record an income tax refund of £28,140 when TDS was deducted from two separate bank accounts, but the refund was credited to only one. It provides guidance on passing journal entries to account for the refund, interest earned, and the TDS amounts, including advice on transferring funds between bank accounts and a suggestion to reconsider maintaining separate Tally systems for different bank accounts.

CA Rashmi Gandhi

Chartered Accountant

44487 Points Posted on 18 February 2023

Bank A/c Dr
To Interest on ReFund A/c
To TDS A/c

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 18 February 2023

Bank A/c Dr. 28,140/-
To Income Tax refund. A/c Cr 26680/-
To Interest on refund A/c Cr 1460/-
( Income tax refund with interest)

Refund is credited to only one Bank account because, in return you have mentioned, refund to be credited to Bank account no so and so

You Can transfer 4775/- to another bank account,
so pass contra entry

Bank A A/c Dr. 4775/-
To Bank C A/c Cr 4775/-
( Transfer entry) .

Mangal Singh Khinchi

Kota

159 Points Posted on 18 February 2023

We maintain two seperate tally for seperate bank accounts how to adjusted two different TDS receivable account with account maintain with different companies bank account

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 18 February 2023

sabyasachi mukherjee

Profession

19978 Points Posted on 18 February 2023

Transfer is not main issue.
çreation òf liability
payment of liability
excess refund to be retained

CA Rashmi Gandhi

Chartered Accountant

44487 Points Posted on 20 February 2023

Just transfer the amount of Income Tax in than bank account.

Practically maintaining two tally for different accounts is not a good idea. You have to maintain details of bank account of other tally also for contra entry or inter transfer entry