accounting entry for food bought for directors
This query is : Resolved
05 June 2010
hi....
I would like to know how to account for the food bought for directors in the afternoon? will it be staff welfare? will it be taxable in their hands?
I would also like to know the accounting entry for electricity bill reimbursed to directors for their apartment.
I would like to know how to account for the food bought for directors in the afternoon? will it be staff welfare? will it be taxable in their hands?
I would also like to know the accounting entry for electricity bill reimbursed to directors for their apartment.
CA.Amit Revankar
(Expert)
05 June 2010
In normal course, director are provided with lunch by the company and in major industry the same is shown in staff welfare expenses. Furthur the same is provided during board meeting, the same is shown in board meeting expenses. Earlier the same was taxable under FBT, but after removal of FBT there is no such provision to charge it in perquisites and in my opinion it will never be taxable.
Furthur personal expenditure of director are required to be reported by the auditor u/s 227(1A). Hence the same will always be shown by specific ledger instead of clubbing in general ledger.
The entry can be passed as :
Director Expenses A/c/ Perquisites to Director A/c
To Bank A/c
Furthur personal expenditure of director are required to be reported by the auditor u/s 227(1A). Hence the same will always be shown by specific ledger instead of clubbing in general ledger.
The entry can be passed as :
Director Expenses A/c/ Perquisites to Director A/c
To Bank A/c
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CMA Ramesh Krishnan
(Expert)
05 June 2010
Food provided to Director is coming under Perquisites only and same can be claimed exemption Rs.50 per meal by the Director
Electricity charges reimbursment is taxble perqusites in the hands of Director
Electricity charges reimbursment is taxble perqusites in the hands of Director
06 June 2010
yeah it is taxable as perquisite but i had doubt about what accounting entry to be passed
CMA Ramesh Krishnan
(Expert)
06 June 2010
Food expenses - Debit Staffwelfare and Electricity Debit Electricity expenses only. One more suggestion, maintaining separate ledger for this type of Director related expenses for reporting purpose
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