Prior year tax adjustment
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 September 2011
There is a company who's audit report finalization is being done by me. The company's balance sheet for AY 2010-11 shows Advance Tax for AY 2007-08, 08-09 and 09-10. The company paid self assessment tax for AY 2009-10 of Rs. 10,000/- in AY 2011-12 and the advance tax net liability was Rs. 1.2 lacs.
I was advised to show Rs. 1.2 lacs minus Rs. 10,000/- which is Rs. 1.1 lacs as prior year tax adjusted and the Rs.10,000 paid to be adjusted against Rs.1.2 lacs i.e. provision less advance tax less paid towards liabilities which is equal to prior year tax adjusted.
Is the tax treatment right? plz reply.
I was advised to show Rs. 1.2 lacs minus Rs. 10,000/- which is Rs. 1.1 lacs as prior year tax adjusted and the Rs.10,000 paid to be adjusted against Rs.1.2 lacs i.e. provision less advance tax less paid towards liabilities which is equal to prior year tax adjusted.
Is the tax treatment right? plz reply.
24 September 2011
Adjust advance tax against the provision as well as the actual payments made so that the same stands to Zero and if refundable then it will appear as receivable.
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