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This query is : Resolved 

Dear Expert,

I work in a small PVT LTD company. I have finalized the accounts of the company for A.Y. 2019-20. There is a net profit (after depreciation) around Rs.7,00,000/- and TDS amount around Rs. 5,00,000/-. Do I need to make any provision for income tax for A.Y. 2019-20 ??

Please guide me.

Please note that provision for income tax is different from advance income tax payment and self assessment tax. If the company earns profit, it has to make provision at the rate specified by income tax act in books.

The Journal entry would be as follows :

Profit and loss account ( Assumed 30% tax) Debit - Rs.2,10,000
Provision for tax ( under current liability) Credit - Rs.2,10,000

Since you have TDS amount of Rs.5,00,000( please ensure in 26 AS ) , you need not pay tax and you will get refund of Rs.2,90,000/- ( Applicable Surcharge and health cess are excluded as it is only example for understanding).

At the time of getting refund the following entry to be passed

Bank account Debit ( For refund ) Debit Rs.2,90,000
Tax Deducted at source Credit Rs.2,90,000

Provision for tax Debit Rs.2,10,000
Tax deducted at source Credit Rs.2,10,000

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