entries in accounts

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 January 2010 I paid the advance tax say Rs1,00,000 up to 31.03.09 but on my total liability comes to say Rs. 1,25,000 and accordingly I made provision for tax of Rs 1,25,000. I paid Rs. 25,000 as self assessment tax n 25.09.09 what entry will be made in accounts for self assessment tax. Can effect of this entry will come under B/Sheet as on 31.03.09?.

Please also tell how the payment of tax effects to profit and loss accounts.I am confused.Pls help.

Bimal Thacker

Bimal Thacker (Expert)

24 January 2010 1) no effect of self assessment tax paid in BS of 31.3.2009.
2)Rs. 125000 will become provision as on 31.3.2009 By dr. Current income tax in P/L A/C and creating liability by cr. Provision for Income Tax.
3) Rs. 100000 paid as advance tax will be shown as Assets side while entering.
4) However while preparing balance sheet net of advance tax liability should be shown i.e. Rs. 25000/=
4) on payment of self assessment tax on 25.9.2009 the liability created as per entry no. 2above will be debited or you create one account of by debiting self assessment tax and then transferred to provision for Income tax liability also advance tax paid RS. 100000 transferred to provision for liability.

Querist : Anonymous

Querist : Anonymous (Querist)

24 January 2010 Thanks, pls also clarify till the assessemnt completion i hav to show provision for tax as well as advance tax. if as on 25.09.09 i make the entry provison for tax ....25000
to bank.....25000
Then how the provision of rs 1,25,000 will be continued till completion.