Adjustment of Provision for Tax, Advance Tax & TDS.
This query is : Resolved
RAVI RAJORIA
(Querist)
01 June 2010
Question:(Period 2009-2010)
Provision for Taxation : Rs. 30000
Advance Tax: Rs. 25000
TDS: Rs. 2000
Actual Tax liability arises to Rs. 40000.
In this case what will be accounting treatment in the books of account in current year and as well in next year?
Provision for Taxation : Rs. 30000
Advance Tax: Rs. 25000
TDS: Rs. 2000
Actual Tax liability arises to Rs. 40000.
In this case what will be accounting treatment in the books of account in current year and as well in next year?
02 June 2010
So, you have to pay the balance income tax of Rs.13000 for the current year.
For current year you have to pass the below entries:
Income tax Dr : Rs.10000
Provision for tax Dr: Rs.30000
Advance tax Cr : Rs.25000
TDS a/c Cr : Rs.2000
Bank a/c Cr : Rs.13000
There is no necessicity to pass entries in the next year against this unless your tax is finalised for this amount i.e., Rs.40000
For current year you have to pass the below entries:
Income tax Dr : Rs.10000
Provision for tax Dr: Rs.30000
Advance tax Cr : Rs.25000
TDS a/c Cr : Rs.2000
Bank a/c Cr : Rs.13000
There is no necessicity to pass entries in the next year against this unless your tax is finalised for this amount i.e., Rs.40000
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