Provisions
This query is : Resolved
17 April 2012
Expense related provisions are allowed under income tax act ?? which are made during closing of financial year like for telephone etc
and if allowed provision created for 100/ and bill received for 125. than 25 will be prior period next year...
and if dis allowed than how to do accounting for the expenses of which bill received late ??
kindly clarifiy this...
and if allowed provision created for 100/ and bill received for 125. than 25 will be prior period next year...
and if dis allowed than how to do accounting for the expenses of which bill received late ??
kindly clarifiy this...
17 April 2012
dabit to prior period expences
17 April 2012
Dear Divya,
Provision for expense is allowed under income tax in the year of provision and the difference in actual and provision will be allowed in the next year.
Provision for expense is allowed under income tax in the year of provision and the difference in actual and provision will be allowed in the next year.
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17 April 2012
In the next year,
the difference amount will not be considered as prior period expense since the difference has not arisen due to error or omission. it is change in estimate and will be allowed as expenditure in next year.
the difference amount will not be considered as prior period expense since the difference has not arisen due to error or omission. it is change in estimate and will be allowed as expenditure in next year.
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17 April 2012
thanx amit sir ji
17 April 2012
but as per income tax act expenses will be disallowed.
17 April 2012
SO WHAT SHOULD WE DONE FOR EXPENSES WHOSE BILL RECEIVED LATE... GENERALLY BILL FOR EVERY TRANSACTION OF MARCH IS RECEIVED IN APRIL
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17 April 2012
As per income tax also, the exepnses will be allowed but in case of exepnses liable for TDS are allowed only if TDS is deducted.
Provision for expenses are allowed if it is made on reasonable basis and with proper estimation. In the next year, you can claim the difference amount as an expense.
Only, prior period expenses are disallowed under income tax. Difference will be allowed in the neaxt year.
Provision for expenses are allowed if it is made on reasonable basis and with proper estimation. In the next year, you can claim the difference amount as an expense.
Only, prior period expenses are disallowed under income tax. Difference will be allowed in the neaxt year.
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