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We know that for Expenses, 2 entries are passed

When Bill Received

Expense Dr

    To Party

When payment made

Party Dr

       To Bank

In this case, if TDS is to be credited in Entry which happens first

 

COMPARISON

Without TDS

With TDS

First Bill then Payment

When Bill Received

Expense Dr       50000

    To Party             50000

When payment made

Party Dr              50000

       To Bank             50000

 

First Bill then Payment

 

Expense Dr          50000

     To Party               45000

    To TDS                  5000

 Party Dr                  45000

      To  Bank                45000

 

Payment in advance, then Bill Received

Party Dr                50000

   To Bank                 50000

 

 

Expense Dr            50000

     To Party                 50000

 

Payment in advance, then Bill Received

Party Dr             50000

   To Bank              45000

   To TDS                5000

 

Expense Dr          50000

     To Party               50000

 

40% Payment in advance then Bill Received, then Balance Payment

Party Dr          20000

   To Bank            20000

 

 

Expense Dr       50000

     To Party            50000

 

 

 Party Dr              30000

      To  Bank                30000

 

 

40% Payment in advance then Bill Received, then Balance Payment

Party Dr              20000

   To Bank                18000

   To TDS                  2000

 

Expense Dr           50000

     To Party                 47000

     To TDS                   3000

 

Party Dr               27000

      To  Bank                27000

(47000 Cr – 20000 Dr.)

 

 

 ASSIGNMENT

CASE-1

TDS payable entries - Understanding Basics

Assuming Bill Received on 10th April and Payment Made on 15 April

Pass Entries

View Answer

 

 CASE-2

Bill Received on 10th April from Max for Consultancy Service Payment made on 15thSept.
When is TDS Deducted & when Deposited ?

Pass Entries

-a-

TDS is deducted on

Bill Received                   10th April

 Or

Payment                          15 September

Whichever is earlier        10th April

And

Deposited by                    7 May (7th of next month of Deduction

 

 

When Bill Recieved

10 April     Consultancy Exp.Dr.         40,000

                                  To Max                   36,000

                                  To TDS                    4,000

TDS Deposit

07 May      TDS Dr.                4,000

                          To Bank               4,000

When Payment Made

15 April      Max Dr.              36,000

                         To Bank              36,000


 

CASE-3

Payment Made in Advance

The Company entered into connect with
Max Ltd on 15 July or 40,000

Whole amount paid in advance on that date

Bill Received on 18th September from Max for Consultancy Service

Pass Entries

-a-

TDS is deducted on

Bill Received                   18 September

 Or

Payment                         15th July

Whichever is earlier       15th July

And

Deposited by                  7 August  (7th of next month of Deduction

 

 

Payment made in advance

15 July              Max Dr.              40,000

                                    To Bank              36,000

                                    To TDS               4,000

07 August          TDS Dr.                4,000

                                     To Bank               4,000

18 September    Consultancy Exp. Dr              40,000

                                                    To Max              40,000

 -ea-

 

CASE-4

First Advance paid then Bill Received
Then Balance amount paid
The Company entered into Contact with Max for Consultancy Services on 15 July

As per contact 20% paid in advance on 15 July
Bill Received later on 18 September Balance paid to Max on 14 Nov.
When is TDS deducted and deposit 

Pass Entries

View Answer

 

 

CASE-5

Flat 8000 paid in Advance on 15 July to max
Bill Received later for Consultancy Services of 40,000 on 18 Sept
Balance amount paid on 14 November

Pass Entries 

View Answer
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  2. Accounts with Taxes
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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 .
  • uttam kumar Dey's image
    How to file 3B form of GST



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  • hem1717's image

    Hi There, "Case 6" as question not mentioned after Case 5, so there is confusion to comprehend the answer. Pls do mention "Case 6" as well.

    View answer
  • SUMIT BADYAL's image

    Payment in advance, then Bill Received

    Party Dr             50000

       To Bank              45000

       To TDS                5000

     

    Expense Dr          50000

         To Party               50000

    Can u elaborate this entry


    View answer
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