Why is TDS shown on asset side?

Answer: TDS is also referred to as Tax Deducted at Source. In case the TDS refers to Tax which has been deducted from the salaries of employees or payments made to contractors or others, TDS will be shown as an Asset since it now needs to be remitted to the Tax department within the specified period.

Is TDS is asset or liability?

In the Balance Sheet, TDS is always shown in Liability Side, as it is a liability to the Goverment, the amount we used to collect on behalf of the Governent in the business process from the others. And it will be shown in Assets side when the amount has been deducted by others on this account.

Is TCS included in cost of asset?

TCS is just like TDS deducted by other persons. Company can take benefit of TCS paid on Car to adjust from Net Tax Liability. Therefore, you need not to consider this as cost of purchase for Car and value will not be capitalised in Fixed Asset Register.

Where is TCS shown on the balance sheet?

Create a TCS ledger under Duties & Taxes or Current Assets as required, to view the amount under the required section of Balance Sheet. In the purchase invoice, select one stock item that is taxable under TCS, and another stock item that does not attract TCS. Select the TCS ledger.

What is the difference between TDS and TCS?

TDS is the tax which is deducted on a payment made by a company to an individual, in case the amount exceeds a certain limit. TCS is the tax which is collected by sellers while selling something to buyers. TCS deduction is applicable on sales of goods like timber, scrap, mineral wood, and so on.

What is accounting entry for TCS?

Accounting entries if TCS is booked on a RECEIPT basis The assumption that receipts have crossed Rs. 50 lakhs from a particular buyer starting 1st April 2021. TCS will be collected at 0.1\% w.e.f. 1st April 2021. Goods of Rs 10,00,000 are sold GST @5\%.

What is TDS and TCS in GST?

TDS and TCS under GST is an acronym for tax deduction at source and tax collection at source. These terms are even present under the Income Tax law.

Is TDS shown in profit and loss account?

Once, the assessee has claimed these expenses by debiting into profit and loss account, it needs to deduct TDS on such expenditure, even if not credited to respective parties account. The law is very clear as per which TDS is required to be deducted when credit or payment whichever is earlier.

What is the purpose of TCS?

Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers.

What is TCS in TDS?

TAX COLLECTED AT SOURCE (TCS) Meaning. TDS is tax deducted at source by any company or individual making a payment if the payment exceeds the thresholds mentioned under respective sections. TCS is a tax collected by the seller, at the time of sale.

What is entry of TDS?

TDS means tax deducted at source. If tax is deducted from assessee’s income and deposited in the Govt. account, its journal entries will be in the books of company. For example ABC company used the service of MR. N person.

How do I show TCS in GST return?

Steps to file ‘TDS and TCS credit received’ on GST portal

1. Step 1: Login toGST portal.
2. Step 2: Go to ‘Services’ > ‘Returns’ > ‘Returns Dashboard’
3. Step 3: Select the return period of GSTR-3B being filed and proceed to ‘TDS/TCS credit received’ tile.

Why is TDS/TCS an asset?

This represents tax that was deducted/collected at source FROM you. On deduction or collection it is recorded as an asset in the books of account because collection of TDS/TCS is rarely the final liability and is considered an advance payment of tax.

How can I correct a mistake in my TDS/TCS return?

Returns/statements relating to TDS/ TCS should be complete and correct. However, Income Tax Department has provided a procedure for correction of any mistake in the original returns/statements by submitting ‘correction returns/statements’.

What are the new TDS/TCS provisions of the CBDT?

The new norm mandates e-commerce operators to deduct TDS at 1 percent in respect of the amount of any sale of goods and services. The CBDt has issued a detailed list regarding the applicability of the new TDS/TCS provisions.

What are the new TDS/TCS provisions for e-commerce?

The new norm mandates e-commerce operators to deduct TDS at 1 percent in respect of the amount of any sale of goods and services. The CBDt has issued a detailed list regarding the applicability of the new TDS/TCS provisions. Regarding the calculation of threshold for the financial year 2020-21, the tax body clarified: