What is journal Entry when we deduct tds & not deposited to Gov.?

I have deducted tds Rs.1000 & paid Rs.9000/- to the Party of Total bill raised by party was 10000/-.

But i made following journal entry :-

1) party Dr.

to bank a/c----------for payment

2) Tds payable

to party A/c ------------For Tds deducted

3) bank ac Dr.

to tds payable-------------when paid to Gov.

is it correct. ?

As i have only paid Rs.9000/- to the party it is showing 1000/- Cr balance how to adjust it & how to pass journal entry for it.

Pls guide its very urgent

3 Answers

  • First entry to be:

    Payment Voucher:

    Dr. Party with Rs.10,000 (Amt. paid Rs.9000, TDS Rs.1000)

    Cr. TDS A/c with Rs.1000 (Directly credit the amount to TDS A/c insted of TDS payable)

    Cr. Bank A/c with Rs.9000

    In this case TDS A/c shown a credit balance of Rs.1000 and that will get adjusted when you actually pay the TDS.

    Next payment voucher when you pay the TDS:

    Dr. TDS A/c with Rs.1000

    Cr. Bank A/c with Rs.1000

    I will pass the above entries if I am in your position.

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