INCOME TAX

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2010 HI

I AM NOT ABLE TO UNDERSTAND ADVANCE INCOME TAX , PROVISION FOR INCOME TAX AND INCOME TAX PAID THIS YEAR AND REFUND OF INCOME TAX CAN YOU PLEASE EXPLAIN THEM WITH A EXAMPLE

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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09 February 2010 Advance Income tax- Income tax for the current FY paying by instalment

Provision for Income tax- Provision provided for Current year Income tax in the books of Accounts

Income tax Paid - Generally it will be paid during Assement finalisation exactly Income tax for a year less TDS Deducted by the client, Advance tax paid balance is to be Paid

Refund of Income tax - Incase any year we paid excess Income tax balance amount we can get refund

Rahul Gupta

Rahul Gupta (Expert)
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09 February 2010 Agreed. Just by way of Example >

Income Tax estimated for the Current FY > Rs. 40,000
Then we will make Provision for IT in books of account as Rs.40,000.

On this basis, Tax deposited during current FY as advance tax - 10,000+ 10,000+15,000 and TDS decucted 5,000

On assessment(after the Current FY is over) if Tax computed to be 42,000 then 2000 (42000-40000) will be deposited as Self Assessment Tax before filing of return.

On other way, if Tax Computed as 38,000 then you will claim Tax refund of 2,000 (40,000-38,000).