Accounting for Income tax Refund

REFUND OF INCOME TAX MIGHT HAVE TWO COMPONENTS - TAX & INTEREST

INTEREST

Interest on Income tax refund is ur income and should be booked under "other/misc. incomes"

TAX

1)  Refund of Tax should be credited to Advance tax/TDS A/c

2) If Advance Tax/TDS has already been adjusted with the provisions then - Refund should be taken after the net profit (after tax) i:e in Appropriation A/c or What called as"Below the Line"

Income tax refund should be shown as a other income in P& L A/c......

IT Refund to be credied to P/L as other Income

Can you please give reasons for your answer. (Is there any literature available)