Many times situation arise when you raise an invoice to your client, on which your client is requires to deduct TDS and pays the balance amount to you.The amount so deducted by your client, he is liable to pay it to the Income Tax department, hence its a receivable for you which you have to claim from the Income Tax Department and not from your client.
Now, we will see how to handle this situation in Accounts and Tally 9 ?
Suppose you have issue a bill of Rash. 1 Lac on which client deducted TDS of Rs. 1000 and pays you Rs. 99 K then the entry in your books will be as under :
Dr. Bank Account Rs. 99 K
Dr. TDS Receivable Account
( This ledger should be open under the Group Loans and Advances ) Rs.1 K
Cr. Client Account Rs. 1 Lac
The result will be that your client Account will be settled off and the amount will be shown as receivable in the Balance sheet which you have to claim from the Income Tax department. You have to obtain Form No. 16A From your client in this regard in support of your claim.
I hope this post will be helpful to you.
Mahendra is founder and CEO of the I Vision Infotech, Authorised Tally Sales and Service Partner and helping Tally users to learn Tally and accounting free through this site
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dear sir,
i have entry follow by ur rules. but still Client account showing balance Rs 319 & Rs 319 Cr in TDS Ledger
so it was correct Entry
Dr-Axis Bnak Rs 15190
Dr-TDS Rs 319 (but TDS ledger made Under-Duites & Taxes)
Cr Client Name Rs 15190
i think…u have booked the TDS but after that you should Rright off..
we have raised an invoice on our client for training services. on the base value of 40000, we have added service tax + ed cess etc ( 10.3%) hence the total invoice value is 44120. On this the client has deducted tds at10% and paid us 39708. Please help me understand how to pass entries for both the sales & receipt transactions and what ledgers to be created.
Hello Subramani,
Thanks for contacting us. I have written an article on service tax entries. you may refer the same for accounting.
In fact, Tally.erp 9 offers automated Service tax calculation,entries, reporting everything. However, we do not offer personalized services on accounting matters except our clients.
There are around 200+articles including Service tax, TDS etc available on our site which you may study to resolve your problem.
Thanks Mahendra for your reply. Actually i went thru some of your articles and have been able to book the sales correctly. The problem i am facing is when i am booking the receipt. I am unable to account for the tax deducted from the total invoice value ( which was the fee+ ST) as when i try to put a tds entry it deducts it on the base value rather than on total value of fee + ST.
Thanks anyways for your help.