PROVISION FOR JNCOME TAX

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 May 2011 DURING THE FINALISATION OF ACCOUNTS FOR THE FINANCIAL YEAR 2009-2010 AN AMOUNT OF RS. 283000/- WAS PAYABLE TOWARDS SELF ASSESSMENT TAX FOR THE ABOVE FINANCIAL YEAR.

THE LAST DATE FOR FILING OF RETURNS FOR THE ABOVE FINANCIAL YEAR WAS 15.10.2010. THANKS TO THE FINANCE MINISTRY FOR EXTENDING THE DATE.

I PAID THE SELF ASSESSMENT TAX ON 25.09.2010 AND ON 04.10.2010 IN TWO INSTALMENTS FOR THE ABOVE AMOUNT.

NOW THE ENTRY IN BOOKS FOR F.Y. 2009-2010 WOULD BE:

INCOME TAX A/C ...... DR

TO PROVISION FOR INCOME TAX.

IN THE BALANCE SHEET THE PROVISION FOR INCOME TAX FOR THE F.Y 2009-10 WOULD BE SHOWN FOR RS. 2,83,000/-.

BUT WHILE FINALISING THE BALANCE SHEET AUDITOR HAS NOT CREATED ANY PROVISION FOR INCOME TAX FOR THE ABOVE AMOUNT AND THE SAME WERE FILED WITH I.T. DEPT.

IS IT CORRECT TO DO SO?

ANOTHER QUESTION IS, AS I HAVE PAID THE ABOVE SELF ASSESSMENT IN F.Y. 2010-2011 FOR THE ABOVE AMOUNT WHAT IS THE ACCOUNT THAT I HAVE TO DEBIT SINCE I CANNOT DEBIT TO PROVISION FOR INCOME TAX ACCOUNT AS NO PROVISION HAS BEEN CREATED IN PREVIOUS YEAR.

KINDLY GUIDE ME PLEASE.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 May 2011 In case the auditors have not shown the Provision in the Final Statements, from Income Tax point of view, there is no practical difficulty in it.

You have to remouve the Provision Entry from the FY 2009-10 accounts and in FY 2010-11, debit the amount to Income Tax A/c directly.

Querist : Anonymous

Querist : Anonymous (Querist)

19 May 2011 Thank You Very Much Sir.
My problem is solved.

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