TDS Deduction for Interest Payable

Step 1

Company Create

Bill-by-bill- Yes

Inventory- No

TDS- Yes

Interest Calculation- Yes

Step 2

1. Got> Statutory> TDS Nature of Payments

Name: Interest other than interest on payments

Section: 194A

Payment Code: 94A

Rate: 10%

Threshold/ Exemption Limit:  0

2. Payment to Contractors

Section: 194C

Payment Cod: 94C

Rate: 2%

Threshold/ Exemption Limit: 75, 000.00

Step 3

Ledger> Create

1. Mr.SC A/c

Under: SC

Bill-by-bill- Yes

Credit Days: 30

Interest Calculation: Yes

Interest Rate: 5%(Calendar Month) all balance

Is TDS Deductible: YES

Deductee Type : Company - Resident

Payment to contractor

Deduct TDS in Same Voucher: YES

PAN: SARTF1234D

2. TDS on Advertisement

Under: Duties & Taxes

Nature of Payment: Payment to Contractor

3. TDS On Interest A/c

Under: Duties & Taxes

Nature of Payment : Interest other than interest on payments

4. Advertising Expenses A/c

Under: Indirect Expenses

TDS Applicable: Applicable

Nature of Payment: Payment to Contractors

5. Interest Payable A/c

Under: Indirect Expenses

TDS Applicable: Applicable

Nature of Payment: Payment to Contractors

Step 4

Voucher Entry

F7 (1/April)

Dr. Advertisement Expenses A/c 5,00, 000.00

Cr. Mr.SC A/c 4, 90, 000.00

Cr. TDS on Advertisement A/c 10, 000.00

Note: Class Create

Alter> Voucher Type> Credit Note

Class: Interest Payable

Use class for interest accounting: Yes

Amount to be treated as compound interest: Yes

Credit Note(Alt+ F6)

Date: 1/May

Cr. Mr.SC A/c 24, 500.00

Dr. Interest Payable A/c 24, 500.00

F7 (Journal)

Dr. Interest Payable A/c 24,500.00

Cr. Mr.SC A/c 20,100.00

Cr. TDS on Interest A/c 4,90.00