provision for expense
This query is : Resolved
06 May 2010
respected experts,
In f.y. 2008-09 Proviion for expense was done in the p & l A/C was rs. 20000/- but in f.y. 2009-10 actual expense incurred Rs. 18000/- so how should I treat remaining RS. 2000/-
How should I acoount it in the books os accounts of f.y. 2009-10.
In f.y. 2008-09 Proviion for expense was done in the p & l A/C was rs. 20000/- but in f.y. 2009-10 actual expense incurred Rs. 18000/- so how should I treat remaining RS. 2000/-
How should I acoount it in the books os accounts of f.y. 2009-10.
06 May 2010
As per my opinion, credit the expense head of current year. I.e current year expense is reduced by Rs.2000/-
Other expert's veiws are solicited.
Other expert's veiws are solicited.
06 May 2010
Provision is reversed and will be treated as income in the current year of Rs, 2000.
Entry.
Provision for exp. Dr.
To P&L account....
Cannot reduce the expense in current year. its not allowed.
in income tax no impact.. deduct it at time of calculation of tax from P&L account as it was disallowed in last year.
Entry.
Provision for exp. Dr.
To P&L account....
Cannot reduce the expense in current year. its not allowed.
in income tax no impact.. deduct it at time of calculation of tax from P&L account as it was disallowed in last year.
06 May 2010
In case of last year return is already filed with ITD, then how can it is disallowed in last year.
06 May 2010
While calculation of TAx provisions are disallowed. We have already paid tax on it....for which we are crediting P*L this time.
07 May 2010
But in the last year we have already filed the eturn and provision for expense has been allowed so now what is to be done??????
07 May 2010
Dear Shving,
At the time of income tax computation , only that provision of expenses is add back , which are allowed paid basic like bonus, leave encashment.
Here it is the case may be related to any expesne like telephone exp, power exp etc.
As per my opinion, current year expenses will be reduced by such amount which is already claimed in last year.
Other expert's views are solicited.
At the time of income tax computation , only that provision of expenses is add back , which are allowed paid basic like bonus, leave encashment.
Here it is the case may be related to any expesne like telephone exp, power exp etc.
As per my opinion, current year expenses will be reduced by such amount which is already claimed in last year.
Other expert's views are solicited.
07 May 2010
Yes .. i agreee.Mr. Bansal. i confirm that for provisions.
But in this year expenses wont be reduced but it should be credited to P*L account as excess prov written back.
But in this year expenses wont be reduced but it should be credited to P*L account as excess prov written back.
07 May 2010
OK,IT CAN BE DONE , EXCDESS PROVISION T/F TO AMOUNT WRITTEN BACK A/C
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