Not to pay creditors

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Arshad

Arshad (Querist)
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20 September 2012 Dear Sir,

I want to know accounting entry for (If i dont want to pay our creditor)

Thanks

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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20 September 2012 Then the balance amount i.e which is you want to not pay amount would be treated as Income for the income tax purpose. For this there is two options of entries
1) Transfer to P&L account as other income.
2) Transfer to capital account. In this option the waved amount would be consider for tax purpose under the head of income from other sources while computing of your taxable income for tax purpose.

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