In section 42 for tax reversal,
While calculating amount of tax reversal, govt says assume 5% of common credit is used for personal purpose and reverse that amount.
But in our case, we haven't used any common credit for perosnal use. If we calculate by 5%, the amount is going in lakhs.
Is it compulsory to reverse 5% as used for perosnal... Is there any way to save it or during audit they will check at invoice level and calculate that amount manually(few hundred rupees)....
As per rule 42, 5% reversal is to be done. This reversal will be done in cases where the supply is for both personal & business purpose. Suppose there is some supply exclusively for ur business like on machinery etc., no reversal is required. For some supplies like car repair, telephone etc. it should be surely done.
Basically, it is to be calculated depending on the facts.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
View Details
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
View Details
CAclubindia
