Dear Sir,
We are making payment to foreign supplier in EURO.While making payment we have first to deposit With holding Tax . For Example on Total payment of EURO 1,00,000 the With holding Tax is Euro 10,000 and Net payment to party is Euro 90,000. withholding Tax is deposited on 220812 while Exchange rate was Rs 66/- per Euro .While making payment on 25.08.12 to party the Exchange3 rate was Rs 67/-per Euro.we are taking Payment basis as transaction date. and diff of Rs 1/- (Rs67-Rs66)that works to Rs 10,000/- is accounted as exchange rate variation. Entry is Dr Expenses 67,00,000 Cr TDS 6,60,000 Cr party 60,30,000 Cr Exchange rate variation 10,000 May please advise we are doing correct accounting. <br> Regards <br> Sanjiv
CAclubindia
