Office Rent

Office Rent is the monthly cost of the premises the company occupies under a short rental agreement. It is a tax-sensitive expense: the company must deduct 10 percent TDS from rent paid to a resident landlord, deposit it by the 25th of the following month and give the landlord a certificate, or the rent is disallowed. In BRAccount the landlord is a Supplier with the Tax Withholding Category Nepal TDS - Rent (Resident), so the Purchase Invoice posts the gross rent here, credits TDS Payable for the 10 percent and Creditors for the net. VAT charged by a registered landlord goes to VAT Receivable. Rent paid in advance for later months belongs in Advances and Prepayments.

Net rent paid = Gross rent - 10 percent TDS; TDS Payable = Gross rent x 10 percent

1. 01Go to Buying > Supplier, open the landlord, and set Tax Withholding Category to Nepal TDS - Rent (Resident).
2. 02Go to Buying > Purchase Invoice > New, pick the landlord and the month, and post Rs 25,000 to Office Rent.
3. 03Tick Apply Tax Withholding Amount if not already on; the TDS row appears.
4. 04Submit. The entry below posts.
5. 05Pay the landlord the net with Create > Payment Entry: Dr Creditors Rs 22,500, Cr Bank.
6. 06Deposit the TDS by the 25th and record it: Dr TDS Payable, Cr Bank.

Post by Purchase Invoice or Journal Entry each month, withholding TDS to TDS Payable. Long leases use Right-of-Use Assets instead.

Dr Office Rent Rs 25,000, Cr TDS Payable Rs 2,500, Cr Bank Account Rs 22,500 for Shrawan rent on the Thamel office.