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MANISH SHARMA

MANISH SHARMA (Querist)

22 March 2016 Provisions made in books of accounts. This is allowable in income tax OR not.

CA Mehta Ankur N.

CA Mehta Ankur N. (Expert)

22 March 2016 Yes Provision is allowable as deduction , consider deffered tax also in calculation.

MANISH SHARMA

MANISH SHARMA (Querist)

22 March 2016 sir, if provision is allowed in income tax. why we apply AS-22. I don't understand the logic.

CA Mehta Ankur N.

CA Mehta Ankur N. (Expert)

22 March 2016 Accounting is different thing & Income Tax is also different. In Accounting if you deem feet for any machine you can provide 50% Dep. also but as per Income Tax Act only 15% will be allowed as Dep. so Accounts & Income Tax both are different & Some time contradictory as well.

MANISH SHARMA

MANISH SHARMA (Querist)

22 March 2016 sir, when we take classes of accounts then teacher say that provision also disallowed in income tax and the provision is also timing difference so we apply AS-22, for e.g. provision for bad and doubtful debt. this is correct or not?

CA Mehta Ankur N.

CA Mehta Ankur N. (Expert)

22 March 2016 https://www.caclubindia.com/articles/bad-debts-provisions-of-bad-debts-15545.asp

I Want to ask one question , Do u know What is Provision ?? Tell me so i can further do clarify, because it all depends on meaning what u know abt provison.

MANISH SHARMA

MANISH SHARMA (Querist)

22 March 2016 sir, provision mean explain through an example- salary of month of march due in march but payble in april month. so we make provision for salary of month of march in march
(Entity has present obligation as a result of past events, and probable outflows of resources to settle the obligation)

Neeraj Sharma

Neeraj Sharma (Expert)

22 March 2016 Its depend upon provision to provision
Because there are certain provisions are disallowed in income tax like provision for doubtful debts .
While provision for salary payable is allowed in income tax.

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MANISH SHARMA

MANISH SHARMA (Querist)

23 March 2016 Thank u sir, for clear my doubt.

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