Provision for tax
This query is : Resolved
22 September 2014
How shall provision of tax be created? Please explain me the process.
Nikhil Kaushik
(Expert)
22 September 2014
this should help you https://www.caclubindia.com/experts/income-tax-provision-accounting-entries-160301.asp#.VCAL_Fcfgh4
Nikhil Kaushik
(Expert)
22 September 2014
you are welcome shakya...
22 September 2014
But I was not asking about the accounting entries but how the amount of provision is to be determined?
Nikhil Kaushik
(Expert)
22 September 2014
the provision will be determined on the basis of tax computation for the year. So you will compute the taxable income as per the Income-tax Act and then make provision for the tax payable as per prevailing tax rates
22 September 2014
If the book profits as on 31.03 is 500000 and the depriciation as per companies act is 20000 and it act is 30000. then what will be the provision?
Nikhil Kaushik
(Expert)
22 September 2014
the tax payble shall be on Rs 4.90 lakhs. The provisions will be created on 5 lakhs and the difference will be accounted for by deferred tax liability.
you need to study the computation of income, deferred tax liability/assets etc to arrive at the right amount of provision
you need to study the computation of income, deferred tax liability/assets etc to arrive at the right amount of provision
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