Provision for audit fee

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rakhib (Querist)
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10 May 2017 While creating provision for audit fee on march 31st, whether service is to be included? Example if Audit fee is rs 25000 and service tax rs 3750, what amount is to be created as provision? Also if short provision is created can we treat the balance amount as prior period item?

Amol S Joglekar

Amol S Joglekar (Expert)
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10 May 2017 Provision is to be made for the GROSS amount.......i.e. inclusive of service tax etc. if any

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rakhib

rakhib (Querist)
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19 May 2017 Thank you for the reply. What to do if provision was created excluding service tax? And service tax was booked as expense at the time of payment during the current year.

Amol S Joglekar

Amol S Joglekar (Expert)
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20 May 2017 Give a note to that extent in the audit report, if any.

rakhib

rakhib (Querist)
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23 May 2017 Thankyou so much......................................................

Amol S Joglekar

Amol S Joglekar (Expert)
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23 May 2017 you are most welcome.

rakhib

rakhib (Querist)
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23 May 2017 A company has introduced capital in the form of Land in a partnership firm. If value of the land is rs7000 in company books but invested at a value of rs10000, what will be the entry in company books?. Kindly help me in this issue.

Amol S Joglekar

Amol S Joglekar (Expert)
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24 May 2017 Debit investment in firm 10000
Credit Land 7000
Credit Profit on transfer of Land 3000

rakhib

rakhib (Querist)
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24 May 2017 rs3000 taxable under capital gain

Amol S Joglekar

Amol S Joglekar (Expert)
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24 May 2017 Yes.
Refer section 45(3) of the income tax act

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