17 October 2014
When assessee paid self assessment tax paid :
When assessee paid the self assessment tax u/s 140A then transferred the TDS and Advance tax paid to capital account( in case of Individual and Firm). In case of company Set off the Tds receivable and advance tax paid with TAX provision created during previous year.
When There is refund :
Keep the TDS receivable and advance tax (To the extend refund claimed in income tax return) under statutory dues from governments heads.
When assessment completed and refund issued then set off the refund amount and recognize the interest if any.
When demand created : Transferred to capital account of partners or individual (depend of status). Entry for payment of Income tax In case of individual / partnership firm Capital a/c ..... DR To Bank a/c (Being Income tax paid)
In case of company (If Provision for tax created) Provision for Income tax ...... DR To Bank A/c
(If no provision created ) Profit and loss account ........DR (Under the head Income tax paid) To Bank A/c
Income tax paid not allowable expenses under the act.
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