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Income Tax

CA Bhaskar Reddy (Unemployed) (126 Points)

16 February 2008

Hi Friends

Whether Income Tax Refund is eligible to show in P&L A/c ?

Whether Inome Tax Refund is Taxable ?

What is the treatment of Income Tax Refund ?

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7 Replies

(Guest)

income tax refund directly to be taken in p&l (appropriation) account in case of co. or capital account in the case of firm or individual and not subject to tax.

shyam (student) (544 Points)
Replied 16 February 2008

Directly on P&L Appropriation A/c

M.Sriram Shenoy (CA Final) (814 Points)
Replied 16 February 2008

Income Tax refund is not taxable. but interest on Income Tax refund is taxable.

CA Hemant T Dewani (Chartered Accountant) (3356 Points)
Replied 16 February 2008

interest received on income tax is taxable under income from other sources

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 16 February 2008

it also depends on the accoounting entry passed for income tax paid , which is being refunded now ............If you Income Tax Refundable A/c is appearing in the Balance Sheet ........the refund will be credited to that account

qarni (student) (1220 Points)
Replied 17 February 2008

thanx for getting this query

(Guest)

Hello, I have a question about itemized deductions. I am using form 1040 and I have donated a car last year that I want to write off for $500.00. Line 40 says to use your itemized deductions OR the Standard Deduction. Shouldn't the $500 donation be ADDED to the Standard Deduction, in turn lowering your taxable income by $500?? The way it is now, its only beneficial to itemize deductions if you donate tons of stuff or expensive items that total more than the Standard Deduction. Am I understanding this correctly? Thanks for any help.