Discussion > Income Tax > Tax queries >

Query

Pages : 1

PCC student

[ Scorecard : 407]

In calculating income from business and proffession, if

Provision for income tax is 4000/- and it is excess to the extent of 3000/-

the inadmissible amount should be 3000.  am i right?

but the solution in the book says 4000/- (full amount)

Plz guide me.......

DHARMA
LEARNER

[ Scorecard : 1022]

Hi,

Income-tax is not an allowable expenditure.  Hence, income-tax debited/claimed as deduction has to be added back to arrive at the taxable income.  Hence, Rs.4000/- has to be added back.

If the provision were to be Rs.1000/- (correct value), income would have been more by Rs.3000.  Hence, either way, taxable income will remain same.

RANJIT
SERVICE

[ Scorecard : 26]

 Originally posted by :priyanka narale " In calculating income from business and proffession, if Provision for income tax is 4000/- and it is excess to the extent of 3000/-  the inadmissible amount should be 3000.  am i right? but the solution in the book says 4000/- (full amount) Plz guide me....... Hi.. Provision for income tax, provision for  fbt alls are inadmisible expenses what ever the amount was. "

CA Sheetal Gude
CA , CWA

[ Scorecard : 54]

hi priyanka, as a general rule all tax provisions are disallowed for computing  p&g

priyanka narale
PCC student

[ Scorecard : 407]

oh sorry guys...... its income tax i.e personal in nature n tax on property so as it is , it is not taxable......it dint strike me while solving......thanks 4 reminding me.

priyanka narale
PCC student

[ Scorecard : 407]

 Originally posted by :Dharmaraju " Hi, Income-tax is not an allowable expenditure.  Hence, income-tax debited/claimed as deduction has to be added back to arrive at the taxable income.  Hence, Rs.4000/- has to be added back. If the provision were to be Rs.1000/- (correct value), income would have been more by Rs.3000.  Hence, either way, taxable income will remain same. "

thank u 4 reminding me....

CA CHINTAN AJMERA
Chartered Accountant

[ Scorecard : 2974]

Income-tax is not an allowable expenditure.  Hence, income-tax debited/claimed as deduction has to be added back to arrive at the taxable income.  Hence, Rs.4000/- has to be added back.

There are 6 Replies to this message

Related Files

Your are not logged in . Please login to post replies

Not a member yet ?? Click here to signup

Message

• Use thank button to convey your appreciation.
• Maintain professionalism while posting and replying to topics.
• Try to add value with your each post.