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Sagar Das (Querist)
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30 November 2015 a cash sales of rs. 25000.
and we are giving cash discount on that bill of Rs. 20000 ,

Is there any problem with income tax part ?

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)
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30 November 2015 There is no provision which prohibits such a large discount. However, if it is given at the time of cash sale then only the sale should be recorded at Rs.5,000. Cash discount is recorded only if it is given after a credit sale.

Sagar Das

Sagar Das (Querist)
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01 December 2015 So how do I do the accounting of that ?

We are selling of goods 25000 , but would shown sales of rs 5000 ,

then should we need to adjust VAT from That Sale ?

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)
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04 December 2015 Your selling price can be Rs.5,000 + VAT or 5,000 all inclusive, that depends on you. If it is all inclusive then you have to split up Rs.5,000 into selling price + VAT.