Treatment of advance tax
This query is : Resolved
Nikhil Bhatia
(Querist)
28 May 2014
Most Companies wrote
Advance Tax(NET OF PROVISION) in asset side &
Provision for tax(NET OF ADVANCE TAX)in Liability side at the same time,
what's the reason behind this?
Advance Tax(NET OF PROVISION) in asset side &
Provision for tax(NET OF ADVANCE TAX)in Liability side at the same time,
what's the reason behind this?
Rupesh Jain
(Expert)
28 May 2014
when company make tax provision and pay advance tax agst this provision and prov. is less than its advance tax and its show assets side.
and when provision is greater than advance tax then its show liability side.
and when provision is greater than advance tax then its show liability side.
Nikhil Bhatia
(Querist)
28 May 2014
Dear Sir,
I already knew about this. But some companies shows both (Provsion for tax and advance tax) at the same time.Kindly check the annual accounts of Infosys or Dabur india.
and one more question whether companies write off their advance tax in next year or they wait for their assessment, .i.e. they accumulate their advance tax until their assessment came.
e.g One company have advance tax of Rs.100000 in the last year & the provision for tax is 150000 so the entry should be
Provision for Tax a/c dr. 150000
To Advance Tax A/c 100000
To Bank A/c 50000
But companies made entries
Provision for Tax a/c dr. 150000
To Bank A/c 150000
and adjust their advance tax at the time of assessment.
I want to Know the reason of this?
I already knew about this. But some companies shows both (Provsion for tax and advance tax) at the same time.Kindly check the annual accounts of Infosys or Dabur india.
and one more question whether companies write off their advance tax in next year or they wait for their assessment, .i.e. they accumulate their advance tax until their assessment came.
e.g One company have advance tax of Rs.100000 in the last year & the provision for tax is 150000 so the entry should be
Provision for Tax a/c dr. 150000
To Advance Tax A/c 100000
To Bank A/c 50000
But companies made entries
Provision for Tax a/c dr. 150000
To Bank A/c 150000
and adjust their advance tax at the time of assessment.
I want to Know the reason of this?
02 August 2025
https://docs.google.com/document/d/1GkLRUmOUfU5pOup4YWn67rsDioAS6nvNE0aKj2KePMY/edit?usp=sharing
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