Dear Sir,
My client credited the income tax refund and interest in the profit and loss account. The income tax applicable to refund and interest.
Regards,
BalendraParmar
Balendra Parmar (Finance Manager) (199 Points)
03 April 2012Dear Sir,
My client credited the income tax refund and interest in the profit and loss account. The income tax applicable to refund and interest.
Regards,
BalendraParmar
Abhishek Sharma
(CA Final)
(78 Points)
Replied 03 April 2012
At the time of booking the TDS refund. The following entries can be passed:
1) either by Debiting the Capital A/c (proprietorship)
2) or by Debiting the Income Tax Refund Receivable A/c
At the time of receiving the IT Refund along with Interest, relevent entries are:
1) either crediting capital a/c with Refund receivable & crediting P&L with Interest thereon
2) or crediting Income Tax Refund receivable with Refund amt & P&L with interest.
In your case, the refund amt. should be credited either to Refund receiveble A/c or Capital A/c & interest to P&L A/c respectively.
Sonam Bidasaria
(CA)
(770 Points)
Replied 03 April 2012
Tax will be only charged on Interest on Income Tax Refund. The refund is the asset of the Company and will be adjusted against the provision for that asst year.
whenever the assessee receives an asst order, he should pass the following entry:
Provision for Income Tax ........................... ..Dr.
Income Tax Refundable/ Bank(If any)........................Dr.
Income Tax for earlier year (Balancing figure) Dr
To Tax Payable (If any)
To Advance Tax/ TDS/ Self Asst Tax
To Interest on Income Tax
To Income Tax fo earlier year (balancing figure)
CA Vanamala Phani Kumar
(Proprietor of M/s Vanamala and Co)
(972 Points)
Replied 03 April 2012
Clearly mentioned that
Income Tax Refund is not taxable .....!!!!!!!
Interest on Income tax Refund is Taxable....!!!!!!!!
valji
(Accounts manager-MBA)
(2150 Points)
Replied 03 April 2012
agreee with above ,your client done right thing,interest on income tax refund is taxable
Abhishek Sharma
(CA Final)
(78 Points)
Replied 03 April 2012
| Originally posted by : valji | ||
 |
agreee with above ,your client done right thing,interest on income tax refund is taxable |
 |
Your client should not credit the income tax refund to the P& L A/c. It is not revenue in nature.
Mihir Doshi
(B.Com, CA, CS, LLB)
(2187 Points)
Replied 03 April 2012
FORAM MEHTA
(ARTICLE ASSISTANT)
(52 Points)
Replied 03 April 2012
Income Tax Refund is not taxable .....
Interest on Income tax Refund is Taxable...
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8310 Points)
Replied 04 April 2012
| Originally posted by : FORAM MEHTA | ||
|
Income Tax Refund is not taxable ..... Interest on Income tax Refund is Taxable... |
|
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8310 Points)
Replied 04 April 2012
| Originally posted by : FORAM MEHTA | ||
|
|
Income Tax Refund is not taxable ..... Interest on Income tax Refund is Taxable... |
|
Manish Tiwari
(Accountant)
(22 Points)
Replied 04 April 2012
Income Tax Refund is not taxable but Interest on Income tax Refund is Taxable...
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