Hi, my bank deducted withholding tax on the interest I received. Please suggest how to record this transaction. I have read guide & searched for this topic but couldn’t find a detailed answer.
Please guide step by step.
Depends on the nature of the withheld tax. Is it a final tax or a deduction on account?
I think shahabb’s answer is correct and what @decentboy008 is seeking. However, I think reconciling with a bank statement is easier if you make it two separate entries. I think your bank statement will probably show it as one entry for interest received and one entry for withholding tax. Although making it one entry in Manager Accounting is appropriate, you wind up trying to match 95 on Manager’s list of transactions with the bank’s 100 and 5.
Additionally, when you enter as separate entries, you would want to put a description of each so you know the two transactions go together.
Please elaborate on what you mean by final tax. I take the statement of income tax deducted on my account from the bank and give it to my lawyer for filing yearly tax return.
Ok I will try
Interesting, why not an accountant?