Tally 7.2

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Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2013 respected sir,
as per income tax act (in respect of income earned from business)in the process to arrive net income from gross income earned (in books of accounts ),vat paid during the year is eligible for deduction.
but we create vat paid leder under head duties& taxes. if i paid one lakh vat during the year, cash account is credited and vat-paid (created under duties&taxes) is debited.this is ok. but as the p&l is not effected there is no deduction in net profit in p&l account in respect of eligibleexpeses that is vat paid during year.
if i create vat-paid account under the head indirect expenses , i will get the deduction from gross to net profit. but in balance sheet duties and taxes head remains as liability. how to solve it.
i request some one to discuss in possible elaborated manner.
thank you sir.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

11 April 2013 Duties & Taxes head designed for the liabilities purpose and it is grouped under liabilities and shows at balancesheet. Those who want to account their indirect taxes through balancesheet root then we have to select it under duties & taxes. And those who have to want to account it through P&L account then you have to select it under Indirect expenditure head.

So for your case don't worry please delete the entries which regarding post under the duties & taxes head and keep or re-entry the transaction under the indirect expenses grouped account.

Are you clear. otherwise please write your doubt if any. Otherwise if you From A.P then you can call me at 8985063892.

OM SAI SRI SAI JAI JAI SAI

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