Disallowbale expenses journal entry

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When finalising private limited company accounts, auditors may disallow certain expenses for income tax purposes, adding them back to your profit. While these expenses aren't disallowed in your company's own books, it's crucial to understand how they affect your taxable income. This ensures your profit and loss account and balance sheet align with the audited financial statements.

Hukam Chand

Hukam Chand (Querist)

16 October 2023 Dear sir
i have finalized the pvt ltd books of accounts but at the time of income tax return my auditor some expenses do disallowed and adding my profit.
can u sugest if anyone how i pass the journal entry for disallowed expenses with example basis if m not do for that then my balance books of accounts profit nd loss account and balance sheet does not match with the audited balance sheet .
pls suggest the journal entry for disallowed expenses in my books of accounts

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

16 October 2023 No need for journal entry for disallowed expenses in the books of accounts.
It's only disallowed for calculating taxable income.

RAJA P M

RAJA P M (Expert)

17 October 2023 Yes I agreed to Mr CA R SEETHARAMAN Sir.... @Mr Hukam, Please check the computation sheet, it's firstly shown profit as per Your books of Accounts. After that shown the disallowed expenses...

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