ACCOUNTING FOR TDS DEPOSITED ON REMITTANCE TO NON-RESIDENT

[S.C. WADHWA]

A Pvt. Ltd. company made payment to a company B in Mauritius

towards services rendered for incorporation of new company.

Payment made was 10000 USD i.e 600000 INR. We also

deposited tds to tune of ₹ 200000/-.

Please advise how it will be dealt with in our books as on 31/03/14.

Whether it will be shown as Amount recoverable to tune of ₹ 800000/-

or ₹ 600000/-.

If it will be shown as ₹ 600000/- how tds deposited by us will be booked

in our books.

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Withholding tax accounting: whether remittance to non-resident is recorded gross or net and how to book TDS. A domestic company paid 600,000 INR to a Mauritius company for services and deposited 200,000 INR as TDS. The core accounting question is whether the amount recoverable should be shown as 800,000 INR (gross payment plus tax) or 600,000 INR, and, if shown as 600,000 INR, how the 200,000 INR TDS deposit should be booked in the payer's accounts.