LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Provision for tax accounting

yogendra (student) (66 Points)

09 February 2016

Why provision for tax is shown in profit and loss account, although it is part of appropriate of profit?

Reply
Follow
Share

6 Replies

yogendra (student) (66 Points)
Replied 09 February 2016

It is also not included by income tax in calculation of business income.

SUDIPTA DASGUPTA (STUDENT) (93 Points)
Replied 10 February 2016

INCOME TAX PAYMENT IS A PERSONAL EXPENDITURE IT IS DISALLOWED AND IT IS AN AMOUNT OF PAYMENT WHICH MADE AS AN APPROPRIATION BEING PERSONAL EXPENSES.

yogendra (student) (66 Points)
Replied 10 February 2016

Thanks sunita, But I was asking for provision for tax,as it is made out of profit loss account. Like entry of provision P/L a/c dr To provision for tax

yogendra (student) (66 Points)
Replied 10 February 2016

Thanks sudipta, But I was asking for provision for tax,as it is made out of profit loss account. Like entry of provision P/L a/c dr To provision for tax

SUDIPTA DASGUPTA (STUDENT) (93 Points)
Replied 10 February 2016

Payment of taxes for the current year is made after the financial year end I.e. 31st march,in the next f.y.As per AS29 a provision is created for writing of estimated expense to be incurred due to income earned during the f.y.which is a past event