Tax paid by firm how to account

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ABDUL VAJEED (Querist)
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11 July 2012 Hi All,

When a firm pays tax which has two partners then can i show tax paid as drawings ? i e 50:50 tax can be shown as drawings under both partner's drawings a/c
Or should i create prov for taxation a/c ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 July 2012 Tax liability of the firm is different from the tax liability of the partners.

You have to create provision for taxation. If the tax has been paid as advance tax record the same as advance tax in the books of the firm.

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ABDUL VAJEED

ABDUL VAJEED (Querist)
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12 July 2012 Thanx

But i heard that only for companies we can create Prov for taxation and not for others

Is that true ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 July 2012 That is not true. Although provision for taxation is disallowed for Income Tax purpose.

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ABDUL VAJEED

ABDUL VAJEED (Querist)
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16 July 2012 Thanxxxxxxxxxxxx a lot

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