Advance tax entry

BANK....DR

TO TDS REfund

TO INT ON INCOME TAX REFUND (IF ANY)..........  

INT ON INCOME TAX REFUND WILL BE TAXABLE A INCOME 

Originally posted by : Ramesh Solanki
	DEAR SIR, IN YEAR 2010-11 ENTRY OF ADVANCE TAX[TDS RECE] 11500. NO TAX PAID. TOTAL 11500.00 IS REFUNDABLE. IN THIS YEAR I RECD ONLY 9700.00 BY TDS REFUND. HOW I ENTRY IN ACC.

Mr. Ramesh, i did not understand what do u mean by "BY TDS REFUND".

First of all, I want to say, if u r saying that for Asst Year 2010-11, as per your tax computation (assuming correct), Rs. 11500 is fully refundable. Then, you should first check the Asst Order, why income tax department  has refunded only Rs. 9700 (It includes interest also), whether AO has dis-allowed any expenditure or what.

Situation - 1 : In case AO has made any mistake, then go fo rectification under Sec 154. 

                     Bank A/c                 Dr.                                         9700

                               To Interest on Income Tax Refund                                   100*

                                To TDS/ Advance Tax                                                    9600*

* Check from your assetment the break up of Rs. 9700

Situation - 2 : In case, you had wrongly computed your tax liability and say Tax liability as per the Order is Rs. 2000 and interest on IT Refund is Rs. 200, then

                    Bank A/c                                               Dr                         9700

                    Income Tax for earlier year                   Dr                         2000*

                                    To TDS/Advance Tax                                                      11500

                                    To Interest on I T Refund                                                    200*

* Check the figure from Asst Order