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

Last updated on April 13th, 2022 at 05:18 pm

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

TCS under Income Tax

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CA Ankita Khetan

Founder at Financepost.in

Chartered Accountant in practice, DipIFRS (from ACCA, UK), Post Graduate in Commerce, Certified Independent Director (from IICA), and holds a certification in Forex and Treasury Management course (by ICAI).

She can be contacted at info.financepost@gmail.com

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