Tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2010 if prov for tax and advance tax amounts are the same, and after finalization we find that there is a tax liability, what entry is to be passed considering that the assessment order is passed w/o any change.
for eg.
prov.for tax 30000
adv.tax 30000
self assmt tax 5000

Shyam Lal Naik

Shyam Lal Naik (Expert)
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16 June 2010 At the time of payment of the self asst. tax you may pass the following entry.

P&L Appropriation A/c Dr.
To Bank/Cash

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2010 thanks mr.shyam
but if prov for tax and adv.tax are squared off than how to set off s.a.tax entry

Shyam Lal Naik

Shyam Lal Naik (Expert)
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16 June 2010 No need to setoff. The amount of Self Assessment Tax already stood charged to revenue(P & L Appropriation A/c).

Alternatively,

Self Asst Tax Dr. 5000
Bank Cr. 5000

P & L Account Appr A/c Dr. 5000
Provision for Taxation Dr. 30000
Self Asst Tax Cr. 5000
Advance Tax Cr. 30000

Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2010 thanks, sir,
what if there is no p&l apr. a/c??

Shyam Lal Naik

Shyam Lal Naik (Expert)
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16 June 2010 Dear Nitin,

just find how does the provision for taxation(Rs. 30000) in your query was created. You shall get to know, What do I mean by P&L Appr. A/c.

The provision was created by passing the following Entry:

P & L A/c Dr. 30000
Prov. for tax Cr. 30000

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