Accounting Entries for TCS u/s 206C(1H)

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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%.

At the time of Sales/booking transaction

Sundry Debtors Account …………. Dr                      Rs.10,50,000

To Sales Account …………. Cr                         Rs.10,00,000

To GST …………. Cr                                         Rs.50,000

At the time of receipt of sale proceeds from debtors

Bank Account …………. Dr                                      Rs.10,50,000

To Sundry Debtors  Account …………. Cr      Rs. 10,48,950

To TCS Payable …………. Cr                           Rs. 1,050

Note: Sundry Debtor’s balance will remain outstanding for the amount of TCS. The seller will have to issue a debit note for the same.

When the payment of TCS is made on the 7th of Next Month

TCS Payable …………. Dr                                        Rs.1,050

To Bank Account …………. Cr                        Rs.1,050

Accounting entries if TCS is booked INVOICE 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%.

At the time of Sales/booking transaction

Sundry Debtors Account …………. Dr                      Rs.10,51,050

To Sales Account …………. Cr                         Rs.10,00,000

To GST …………. Cr                                         Rs.50,000

To TCS Payable …………. Cr                            Rs. 1,050

At the time of receipt of sale proceeds from debtors

Bank Account …………. Dr                                      Rs.10,51,050

To Sundry Debtors  Account …………. Cr      Rs.10,51,050

When the payment of TCS is made on the 7th of Next Month

TCS Payable …………. Dr                                        Rs.1,050

To Bank Account …………. Cr                        Rs. 1,050

Flowchart for applicability of TCS

 

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About CA Ankita Khetan 174 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

3 Comments

  1. IN CASE DEBTOR IS NOT WRITTEN OFF FULLY THE AMOUNT THAT HAS NOT BEEN WRITTEN OFF SHALL BE SHOWN AS OUTSTANDING DEBTOR

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