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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

-a-

When Bill Recieved

10 April     Consultancy Exp.Dr.         40,000

                                  To Max                   36,000

                                  To TDS                    4,000

When Payment Made

15 April      Max Dr.              36,000

                         To Bank              36,000

TDS Deposit

07 May      TDS Dr.                4,000

                          To Bank               4,000

 -ea-

 

 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

 -ea-

 

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

-a-

 

Bill received on

Payment made on

TDS Deduction

TDS Deposit on

20% TDS  

 18 Sept  

 15 July    

15 July      

   7 Aug

80% TDS      

 18 Sept  

   14 Nov

18 Sept  

     7 Oct

 

 

20% Advance   

20% of 40,000 = 8000                              

                 Max Dr.              8,000

                           To Bank              7200

                            To TDS               800

TDS Deposited

                  TDS Dr.                800

                             To Bank              800

Bill Recd Of 40,000

                  Consultancy Exp. Dr              40,000

                                                    To Max             36,800

                                                    To TDS             3,200 
                                                   
TDS Deposited

                 TDS Dr.                3200

                               To Bank             3200

 

Balance Amt paid to Max

                    Max Dr.              28,800

                           To Bank              28,800
                                                      (36,800 –8000)

-ea-

 

 

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 

-a-

Amount paid will be deemed to be net of TDS

                                    

  CASE 5

  CASE 6

Amount paid                    

        8,000

8888 (8,000  × 100/90)

Less TDS                            

         800

888

Net amount paid                

       7,200

8000

Pass Entries

8,000 Payment Advance

15 July          Max Dr.              8,888

                           To Bank              8,000

                            To TDS               888

TDS Deposited

7 August           TDS Dr.                888

                                To Bank              888

Bill Recd Of 40,000

18 September            Consultancy Exp. Dr              40,000

                                                    To Max                        36,888

                                                    To TDS                         3,112  (4000 –888)
                                                   
Balance TDS Deposited

7 Oct                 TDS Dr.                 3,112

                               To Bank               3,112

 

Balance Amt paid to Made

14 Nov                   Max Dr.              28,000

                                      To Bank              28,000
                                                      (36,888 –8888)

-ea- 

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 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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