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dear sir, i am a fresher of accountant and intend to know how to treat tds after receiving certificate of tds from the party to whom i have deducted tds. thanks rajesh
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tds adjustment

It is not clear whether u r deducting TDS or TDS deducted by Party ?

In case of TDS deducted by Party:

You have submitted a bill to party and party deducted TDS - accounting treatment is :

Party a/c ......................Dr ( gross bill minus TDS amount)

Adv.TDS ded.by client......Dr

To work done bill ( income) a/c .......Cr( gross bill submitted to party)

You have to get the certificate (Form-16 A ) from the party, it will be required at the time of annual income tax return for adjustment against total tax liability. suppose your tax liability comes Rs.100/- TDS deducted by party Rs40/-.Your net tax liability is Rs.60/- to be deposited to income tax department during the accounting year.

In Case of TDS deducted by your company :

You have to provide the TDS certificate to Party and deducted TDS to be deposited to income tax department.

Accounting entry is :

Work done charges/expa/c...........Dr ( gross bill )

To party a/c .............cr ( gross bill minus TDS)

To TDS a/c..............Cr ( TDS amount)

Ensure that your TDS ledger should be zero every month after depositing the TDS to income tax dept.

Tejeswar Choudhury

JMC Projects (I) Ltd

Raigarh
Dear sir
thank for the reply now the concept is clear but i want to know how i can decide the rate of tds on salary ?or how can i calculate the rate of tds to be deducted from the salary of an employee.
suppose the salary of an employee is Rs. 20000 pm then what will be rate of tds on his salary.
pls guide me.
thanks
rajesh
Dear Rajesh,
TDS cannot be calculated only from Net salary. You have to given all the data like Basic salary, HRA , all allowances etc.
For a financial year your tax is calculated and divide it by 12 and you will get the TDS/ month.
Regards
kkkamlesh
I am a fresher, i am dowing jobs in an accounts section. At present i want to know how to prepare itr - 1 and fill form 16. Also i want to know in what purpose form 16 and 16a is require, please teal me. Partha
Dear All,
kindly suggest how to correct PAN no and tds amount in filled ETDS.
We done III Qtr return in that by mistakenly we uploaded supplier Pan no and amount how to correct it now? kindly suggest..
Regards
Shubha
Procedure for regulating refund of amounts paid in excess of tax deducted and/or deductible
1. The Board have been considering the manner of refunding the amount paid in excess of the tax deducted and/or deductible (whichever is more) under sections 192 to 194D of the Income-tax Act. The Board are advised that such excess payment can be refunded, independently of the Income-tax Act, to the person responsible for making such payment subject to necessary administrative safeguards.
2. In suppression of the earlier instruction on the subject, the following procedure is laid down to regulate the refund of such excess payments.
3. The excess payment would be the difference between the actual payment made by the deductor and the tax deducted at source or that deductible, whichever is more. This amount should be adjusted against the existing tax liability under any of the Direct Tax Acts. After meeting such liability the balance amount, if any, should be refunded to the assessee.
4. Where the tax is deducted at source and paid by the branch office of the assessee and the quarterly statement/annual return (in case of salaries) of tax deduction at source is filed by the branch, such branch office would be treated as a separate unit independent of the head office. After meeting any existing tax liability of such a branch, which would normally be in relation to the deduction of tax at source, the balance amount may be refunded to the said branch office. The Income-tax Officer, who will refund the amount, would be the one who receives the quarterly statement/annual return (in case of salaries) of tax deduction at source from that branch office and keeps record of the payments of tax deduction at source made by that branch.
5. The adjustment of refund against the existing tax liability should be made in accordance with the present procedure on the subject. A separate refund voucher to the extent of such liability under each of the direct taxes should be prepared by the Income-tax Officer in favour of the income-tax department and sent to the bank along with the challan of the appropriate type. The amount adjusted and the balance, if any, refunded would be debit able under the sub-head Other refunds below the minor head Income-tax on companies major head 020Corporation Tax or below the minor head Income-tax other than Union Emoluments major head 021Taxes on incomes other than corporation tax according as the payment has originally credited to the major head 020Corporation tax or the major head 021Taxes on incomes other than corporation tax.
6. Since the adjustment/refund of the amount paid in excess would arise in relation to the deduction of tax at source, the recording of the particulars of adjustment/refund should be done in the quarterly statement of TDS/Annual return (in case of salaries) under the signatures of the Income-tax Officer at the end of the statement, i.e., below the signatures of the person furnishing the statement."
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