Journal Entry of TDS

                                                            Journal Entry of TDS

TDS (Tax Deduction source) as per the income tax Act- The person who is responsible to make payment after a threshold limit he should be pay tax and the tax will be paid to the government. TDS can be deposit Quarterly, Half yearly and annually. TDS is deducted on salaries, interest payment by banks, payment of commission, Payment of rent, payments made to consultants, TDS on profession.

Example:-  Abc Pvt Ltd makes a payment for office rent of Rs 100000/- per month to the owner of the property. TDS rate is 10%.

Abc pvt. ltd must deduct TDS of Rs 100000*10%=10000/- and pay balance Rs (100000-10000)=90000/- to the Landlord.

Threshold Limit on rent= 180000 per year/-. It mean the per month threshold limit is 180000/12=15000/- Per month.

Thus the recipient of income i.e. the owner of the property in the case receives the net amount of Rs 90000 after deduction of tax at source. But He will add gross amount i.e. Rs 100000/- to his income and will take credit of the amount of TDS is already deducted i.e. Rs 10000/- by Abc pvt ltd against his final tax liability.

 Here is the link of TDS Rate Chart.

https://excelendivour.blogspot.com/b/post-preview?token=9XBy7GABAAA.KmmBd7c1u2x1yeF6rr7z0HIRun1n4c9vlsPNSCqeRS7UY856GZphYoSZLY_mwGjndY2GLaWwxvA6YAXipSOZbg.HTEiB8CIdUZLLi4loLoWdw&postId=2988255015128561351&type=POST

Journal Entry of TDS 

1	Rent paid…………………..Dr.	200000
	To TDS……………………..………..Cr.		20000
	To Mohan……………………………Cr.		180000

Another Example of TDS in tally.

Example:  Paid Rent To Mohit 230000 Pa.

Simple Rule is-

Indirect Exp	Dr.
Sundry Creditors	Cr.
TDS	Cr.

Create The following Ledger in Tally.

1.	Rent Paid	Under (Indirect Expenses)
2.	TDS	Under (Duties and Taxes)
3.	Mohit	Under (Sundry Creditors)

Press F11- Statutory and taxation> Enable TDS- Yes, Set/alter TDS detail- Yes

Open the company, Gateway of Tally > Accounts info > Ledger > Create>Rent paid under (indirect Exp).

when you will reach at nature of payment then press esc

Then      Select- Applicable Option

Tharshold limit- If the amount will be more than 180000/- TDS will deduct @10%.

IF the person has no PAN card TDS will deduct @20%.

Then Press Alt+A

Then Press Alt+A

Then Press Alt+A

Gateway of tally > Accounting Voucher > Press F7

Then Press Alt+A