Querry

This query is : Open

ADVOCATE NUSRAT (Querist)
Follow

08 February 2016 firm paid penalty of Rs.85000 for F.Y 2014/15 On 27/05/2015 which is imposed u/s 143,
how can i make the entry in tally,as the accounts are maintained for F.Y 2015-16?

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

08 February 2016 Dr.Prior period expences (Exp)
Cr.Bank
(Penalty paid for F.Y.2014-15 as imposed u/s 143

ADVOCATE NUSRAT

ADVOCATE NUSRAT (Querist)
Follow

08 February 2016 CAN WE CLAIM PRIOR PERIOD EXPENCES IN CURRENT FINANCIAL YEAR IS IT ALLOWED UNDER ACT

ADVOCATE NUSRAT

ADVOCATE NUSRAT (Querist)
Follow

08 February 2016 AND UNDER WHICH HEAD I HAVE TO CREATE LEDGER FOR THIS

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

08 February 2016 1. It is not a prior period item. AS 5 defines prior period item as income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods.
2. Demand/ penalty imposed is not covered by the above definition. Accordingly it is not prior period item
3. Open a new ledger "Income Tax Penalty" under indirect expenses. You can have any other name also.
4. Penalty paid under Income Tax Act is not admissible as deduction under the Income-tax Act.

Message likes : 1 times

ADVOCATE NUSRAT

ADVOCATE NUSRAT (Querist)
Follow

12 February 2016 if penalty paid is not admissable so why i claim it as indirect expences, now i debit the penalty from capital account and cr cash is it corect ???????

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now