Advance tax

Sir what willbe the entry of advance tax? And wat is the entry of sett of it against provison for taxation? And if advance is excess paid what will be treatment with advance tax\? Please answer me in detils?

Replies (2)

you have adjust advance tax against provision for tax


hi..

when you pay advance tax accounting entry is:-

Advance taxA/C Dr 

  To Bank

At the time of finalisation of account provision for taxation is created by passing following entry :-

P/L A/c Dr

To PFT

Advance tax paid earlier will then be adjusted against this provision by following entry :-

 PFT A/c Dr

To Advance Tax

And if advance tax is excess paid it will stay in BS under the heading Current asset  Loans & Advances .You will get refund of excess payment made.

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