Amount to be credited to p/l a/c in case of refund

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Aniruddh Shenvi (Querist)
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05 August 2011 I had a basic query which i am posting through an example:
1. provision for tax : 2300000
2. advance tax paid/tds : 2280000
3. refund for the assessment year recieved : (118510)

What amount should be transferred to p/l a/c i.e. only the amount charged earlier as provision to tax or the former including the refund amount or the net amount i.e. amount net of tds/advance tax along with the refund.
It will be great if the entry and effect is also provided
Thank you

Preety Parik

Preety Parik (Expert)
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05 August 2011
1. Provision for Income Tax...Dr 23,00,000
To Advance Tax 22,80,000
To Income Tax Payable 20,000

2. Tr the balance in Provision for Income Tax to P/L Account. It will be appear as debit in P/L.
3. Income Tax Payable will be appear in Liability side of BS
4. Your refund pertains to earlier Years.
The amount due to be refund would be appearing as Opening Balance under group Loans and Advance.
If Yes then
Bank A/C.. Dr
To Income Tax Refund Receivable A/C
If No it means U have claimed it in earlier years then...
Bank A/C.... Dr
To Income TAx refund A/C
Tr. the bal of Income Tax refund to P/L.It will appear in Credit of P/L

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