Income Tax Expense

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Pranav (Querist)
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16 October 2017 What accounting entries should be passed in P. Y 2017-18 for an individual in case he had got his TDS deducted in P. Y 2016-17 of Rs. 42000 and he paid income tax of Rs. 2000 and received a refund of Rs. 40208 along with interest in P. Y 2017-18

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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16 October 2017 Entry for TDS Deducted
TDS Receivable DR 42000
To Income 42000

For Advance Tax
Advance Tax DR 2000
To Bank 2000

For Income Tax Refund with Interest (It is assumed 40000 is IT refund & 208 is Interest on IT Refund)
Bank a/c DR 40208
Capital A/c DR 4000
To Interest on IT Refund 208
To TDS Receivable 42000
To Advance Tax 2000

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Pranav

Pranav (Querist)
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16 October 2017 I did this, kindly guide me whether it's correct? : 1. TDS Receivable Dr 42000 To Debtor 42000

Pranav

Pranav (Querist)
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16 October 2017 2. Income Tax Expense Dr 2000 To Provision for Income Tax 2000 3. Bank Account Dr 40208 Provision for Income Tax Dr 2000 To TDS Receivable 42000 To Interest Income 208

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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16 October 2017 Yes your entry is correct

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