Income Report

Wm wm+gnc at tarrcity.demon.co.uk
Thu Jul 24 07:06:05 EDT 2014


Wed, 23 Jul 2014 19:17:46
<16164932.2dMCShWZS2 at calufrax.nottingham.standbyevents.co.uk>  Maf. King
<maf at chilwell.net>

>On Wed 23 July 14 18:26:09 Wm wrote:
>
>>
>> If so surely you create an invoice for the amount received + tax when
>> you receive it.  The amount received goes to bank/cash and the
>> calculated tax amount goes to the same place as your purchase tax
>> offsets.  Some time later you work out the in and out difference and
>> declare that.
>>
>> Am I misunderstanding how things work in India, Narendra?
>
>Hi Wm,
>
>If (and that is a big if) I understood the OP correctly, I _think_ that the
>tax is paid directly to the Indian government by the client,

If that is so then the OP should have a payment document (perhaps
presumed or virtual) of some sort saying something along the lines of
"I, Wm, am paying you, Maf, 1 Rupee and I've accounted for the taxes as
well and they are 10p but I'm going to declare that so you don't have to
worry about it" [1]

> and this what
>needs to be tracked....
>
>1.  Do work
>2.  Write invoice + add tax

Surely Vikas (the OP) is just guessing the tax at this point?  He
doesn't and may never know if the client actually pays the government so
like it or not it is an accrual? <-- question mark because this is now
an accounting conundrum, I think.  Is the OP cash accounting or accrual
accounting? (I think this was the point Mike was raising earlier).

>3.  Client pays invoice (cash basis, so transfer then (and only then) from
>Income to Bank in GC.  no A/R involved)

makes sense, emphasising the point that this isn't a gnc issue so much
as a "how do I tell the tax people what happened" issue, perhaps?

>4.  Client pays tax portion to consultant's tax account at government.

Whoa!  Does V have a way of checking whether that has happened?  I don't
know.

>I think that there could be significant time between 3 & 4, and that is the
>cause of the confusion.  I think the OP is trying to tie together invoices
>written, money paid and tax paid by individual customers.

OK, but how does he know what the customer has paid?  I think the answer
is that he doesn't know so he declares what he thinks they should have
paid.  The tax statement will look something like this
===
Received by Vikas:
        20 Rs
TDS:
         1 Rs Wm
         1 Rs Maf
         1 Rs etc
===

>But I'm not sure.  Narendra
V not N but I understood
>has said that transaction reports on "Bank or Tax"
>and also "Bank and Tax" don't show what is required, so I'm at a loss at the
>moment....

Me too, I'm guessing it is a time issue, e.g. Wm pays Maf 20 just before
the tax year ends, does maf record that in this year or next?

>0.02

[1] diminutive of Indian Rupee is paisa or paise so the 2p works unless
you're in a country that uses cents :)

-- 
Wm...


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