Answer / m bharath

TDS A/c Dr.
To Party A/c.

Suppose "A" is a company providing Cab Services to "B" an individual. (Cab Hiring Charges Rs. 1,00,000/- P.M) As per Income Tax Act, payment more than 50,000/- to Individual / Company has to deduct the TDS @ 1%/2%.

Entries in Books of "A" (TDS Receivable)
Bank / Cash A/c Dr. 99,000/-
TDS Receivable A/c Dr. 1,000/-
To "B" A/c. 1,00,000/-

Entires in Books of "B" (TDS Payable)
"B" A/s Dr. 1,00,000/-
To Bank/Cash A/c. 99,000/-
To TDS Payable A/c. 1,000/-

Answer / h.r. sreepada bhagi

Example above is good. Note one correction : In the books of
Mr. B, Mr. A's A/c should be debited on payment. In the
entry since the parties' a/cs are debited/credited on
payment, it's implied that Rental Income / Expense has been
accounted earlier to payment. In that case TDS should also
have been accounted then. Following are the entries in teh
books of Mr.A :

On booking the income (TDS amount not @ 2% + Cess)
B's A/c Dr. Rs.99000/-
TDS Receivable/Advance IT A/c Dr. Rs. 1000/-
Rental Income A/c Cr. Rs.100000/-

On receipt of money from B :
Bank A/c Dr. Rs.99000/-
B's A/c Cr. Rs.99000/-

Answer / crazy fundas

A provides a Cab Service to B an Individual so he can
account this Revenue only when the service is provided
(Earned Revenue) otherwise any payment received is an
advance. So Supposedly the service is executed ofr 1 month.

In A's Books (he will recognise Revenue as follows)

B's Account Debit Rs.99000/- (Creation of Debtors for
receivable)
TDS A/c Debit Rs.1000/- (Create current Asset for TDS
Certificate receivable from Buyer)

To
Sales A/c Rs.100000/- (Sales)


In B's Books

when the service is provided and claimed for he will pass
entry as follows

At the time of Expense Booking (Accrual)
Rental Expenses A/c Dr Rs.100000/-
To A's A/c Cr. Rs.99000/-
To TDS Payable A/c Cr. 1000/-

At the time of making payment to A
A's Account Dr. 99000/-
To Cash/Bank A/c Cr. 99000/-

At the time of making TDS payments to Govt.
TDS Payable A/c Dr. 1000/-
To Bank A/c Cr. 1000/-


B gives TDS Certificate to A which A can adjust against his
Taxable Income in simplest terms.

Answer / victoriya

THE ABOVE ENTRIES ARE CORRECT IN FUTUR ACCOUNTS

Answer / gajanandw

Question :- Now once actual TDS certificates would be
received from "B" then "A" would Credit " TDS Receivable
A/C" in his books but which A/C would he debit? Will it be
"ADVANCE TAXES"

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