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Account antry On disallowance

Jagdish (Article) (123 Points)

03 June 2011

If exp. is disallowanced then what will be accounting entry?

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11 Replies

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 03 June 2011

as per my opinion it is matter of income tax only.

if the expense is disallowed than it will simply be added in the income of assessee

GAURAV JAIN (C.A. F!N@L Group-1 Clear...) (278 Points)
Replied 03 June 2011

yes, expenses will simply be added in the income as per income tax act and no accounting treatment will be done.

Harpreet (* * * * * *) (1670 Points)
Replied 03 June 2011

The impact of disallowance of expenditure will be on computation of Income not on books of accounts. Penality on such disallowances should be treated as expenditure in current FY in which demand will come. I hope you will get my point.

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valji (Accounts manager-MBA) (2150 Points)
Replied 03 June 2011

expenses which is disallowed is added in computation of total income after that tax is calculated

rachit jain (chartered accountant ) (635 Points)
Replied 03 June 2011

If expenses are disallowed and this is a timing difference then deffered tax asset will arise.

please ractify me if i am wrong.....

swapnil (CA Final) (598 Points)
Replied 03 June 2011

yes i agree with gaurav and also d rest

Learner (Student) (409 Points)
Replied 03 June 2011

If expenses are disallowed and this is a timing difference then deffered tax asset will arise.

please ractify me if i am wrong.....

This is permanent timing difference, this should not be considered for deferred tax asset/liabilities.

PRAKASH AGARWAL (SERVICE) (46 Points)
Replied 04 June 2011

Disallowance of exp is matter related to income tax assessment. It shall have no impact on books of accounts. However if required tax provison for earlier year may be made in subsequent years on the basis of assessment.

Aparna Raja K.C (Student) (520 Points)
Replied 04 June 2011

dissalowance shall be considered only while computing income tax..

so while preparing ur P&L .. do include all ur expenses...

integration of companies act with income tax act is done with the help of deferred tax :)

CA-AK (CA) (600 Points)
Replied 05 June 2011

If an expense is disallowed it simply gets added to ur income. It is the matter of calculation of Income Tax, No entry is made for it in booksof accounts

(Guest)

Originally posted by : Harpreet
	The impact of disallowance of expenditure will be on computation of Income not on books of accounts. Penality on such disallowances should be treated as expenditure in current FY in which demand will come. I hope you will get my point.