journal entry for self assessment tax
This query is : Resolved
04 May 2010
i want to pass entries for payment of self assessment tax. i have debited advance tax and tds receivable in current assets.
now, while paying self asseesment tax, what entry i am supposed to pass and when i receive the assessment order from the itax dept. after a year or two, then what entry i am supposed to pass if the amount as assessed by the department is different from the amount paid as income tax by the company.
now, while paying self asseesment tax, what entry i am supposed to pass and when i receive the assessment order from the itax dept. after a year or two, then what entry i am supposed to pass if the amount as assessed by the department is different from the amount paid as income tax by the company.
04 May 2010
FOR SAT:
SELF ASSESSMENT TAX A/C DR
TO BANK A/C
KEEP SAT UNDER CURRENT ASSETS.
ON RECEIVING ORDER:--
PROVISION FOR TAXATION A/C DR.
TO TDS RECEIVABLE A/C
TO ADVANCE TAX A/C
TO SELF ASSESSMENT TAX A/C
ANY DIFFERENCE SHOULD BE ADJUSTED WITH WITH PROFIT A BY PROVIDING AGAINST SHORT PROVISION OR WRITING OFF EXCESS PROVISION.
SELF ASSESSMENT TAX A/C DR
TO BANK A/C
KEEP SAT UNDER CURRENT ASSETS.
ON RECEIVING ORDER:--
PROVISION FOR TAXATION A/C DR.
TO TDS RECEIVABLE A/C
TO ADVANCE TAX A/C
TO SELF ASSESSMENT TAX A/C
ANY DIFFERENCE SHOULD BE ADJUSTED WITH WITH PROFIT A BY PROVIDING AGAINST SHORT PROVISION OR WRITING OFF EXCESS PROVISION.
04 May 2010
Correct entry should be
Current Tax/ Provision for tax A/c DR.
To
Bank/cash A/c
Current Tax/ Provision for tax A/c DR.
To
Bank/cash A/c
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04 May 2010
Will the entries be any different if the firm is a sole proprietorship firm? Am i suppose to book income tax expenditure in the books or shall i pay through capital account?
Aditya Maheshwari
(Expert)
04 May 2010
You should pay through capital a/c as income tax expense as it is not allowed. So in effect it is passed to the capital a/c only in case of sole proprietoship firm.
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