What happens to TDS Which is Deducted?

We can reduce it from our Income Tax Liability

So TDS is like Advance Income Tax

Note

For Individuals, Income Tax Rate is as per Income Tax Slab Rate. Cess 4% is appliable for Financial Year 2018-19

There is Rebate of 2500 also if Income between 250000-350000

 For Individuals, Income Tax Slab Rate Is applicable 

INCOME TAX
UPTO 250000 Nil
250000-500000 5% of Income Greater than 250000
500000-1000000 20% of Income Greater than 500000+12500
>1000000 30% of Income Greater than 1000000+112500

 

Slab Rate 1.jpg

tds-new-image0.png

 

Example 1

Suppose a Contractor provides Construction Services of 10 lacs to Government Department

Govt Paid him whole 10 lacs(No TDS Deducted

Expenses of Construction are 400000

What is tax payable

View Answer

Example 2

Suppose a Contractor provides Construction Services of 10 lacs to Government Department

Govt Deducted 1% TDS and paid him 990000

Expenses of Construction are 400000

What is tax payable

View Answer

Example 3

Suppose a Contractor provides Construction Services of 10 lacs to Government Department

Govt Deducted 1% TDS and paid him 990000

Expenses of Construction are 600000

What is tax payable

View Answer

Example 4

Suppose a Contractor provides Construction Services of 10 lacs to Government Department

Govt Deducted 1% TDS and paid him 990000

Expenses of Construction are 800000

What is tax payable

View Answer

 

Assignments

Pass Entries of Case 1 to Case 4 at the end of the year

Case 1

View Answer

Case 2

View Answer

Case 3

View Answer

For Individuals, Tax is a personal liability, hence we put in Drawings)


  1. Accounts and Finance
  2. Accounts with Taxes

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .