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 When Bill Received Expense Dr 50000 To Party 45000 To TDS 5000
When payment made 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
Assuming Bill Received on 10th April and Payment Made on 15 April
Pass Entries
View answer
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
CASE-2
Bill Received on 10th April from Max for Consultancy Service Payment made on 15thSept.
When is TDS Deducted & when Deposited ?
Pass Entries
View answer
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
View answer
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
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
|
|
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)
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
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)
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