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Though an employee can pay the income tax individually after drawing the salary from
the office, the general tradition is that the income tax is deducted by the office, at source
while distributing the salaries and, thus, it is also a deduction from the salary. Two entries
should be passed in case of this deduction too, as in the case of Personnel Provident Fund.
While deducting income tax:

Dr. B.E. Salary
Cr. Income Tax/Social Security Tax
Cr. Treasury Single Account (TSA)

While depositing the deduction i.e. income tax and social security tax in the concerned
A/c,
Dr. Income tax/Social Security Tax
Cr. Treasury Single Account (TSA)

iii. Personnel Loan(Tejarath Sapati)
The staff/personnel/employees of an office may fall into some economic crises. So,
they take loan from the office, on condition of repaying it from their salary each month.
Thus, it is also deducted from the salary of the concerned staff employees. The accounting
treatment is the same as to the other deductions. While deducting the personnel loan
from the monthly salary,
Dr. B.E. Salary
Cr. Personnel Loan/ Tejarath Sapati
Cr. Treasury Single Account (TSA)

While depositing the deduction in the concerned A/c,

Dr. Personnel Loan
Cr. Treasury Single Account (TSA)

iv. Citizen Investment Fund
A staff can voluntarily deposit certain amount on monthly basis in a fund called
citizen investment fund. While deducting the citizen investment fund from the monthly
salary;

Dr. B.E. Salary
Cr. Citizen Investment Fund
Cr. Treasury Single Account (TSA)

While depositing deducted amount:
Dr. Citizen Investment Fund
Cr. Treasury Single Account (TSA)
(Being deducted amount of citizen investment fund is deposited into concerned account

232 Aakar’s Office Practice and Accountancy - 10 Journal Voucher 233