Change in accounting method
This query is : Resolved
parteekjain
(Querist)
02 June 2012
CAN ANYBODY PLEASE TELL ME ABOUT
HOW CAN I CHANGE THE METHOD OF ACCOUNTING FROM CASH BASIS TO ACCRUAL BASIS. AND WHAT WILL BE EFFECT OF PROFIT & LOSS ARISING FROM SUCH CHANGE IN METHOD AND HOW DO WE TREAT THIS PROFIT OR LOSS FOR TAXATION PURPOSE.
QUICK REPLY IS HIGHLY APPRECIATED
THANKS IN ADVANCE .
HOW CAN I CHANGE THE METHOD OF ACCOUNTING FROM CASH BASIS TO ACCRUAL BASIS. AND WHAT WILL BE EFFECT OF PROFIT & LOSS ARISING FROM SUCH CHANGE IN METHOD AND HOW DO WE TREAT THIS PROFIT OR LOSS FOR TAXATION PURPOSE.
QUICK REPLY IS HIGHLY APPRECIATED
THANKS IN ADVANCE .
Soumitra Basu
(Expert)
03 June 2012
You have to prepare an account on the basis of accrual basis and disclose the same in notes on account and income tax return. Please note that you have to maintain consistency. Profit or loss arising from this change method shall be taxable in current year provided the change is for genuine reason and not for the purpose of tax avoidance.
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