i want to know about how this AS-22 would be applied on the accounts of ind/HUF. the same is become applicable to IND/HUF from this A.Y. how would the effect of deferred tax will be given to the capital of ind./HUF?
with regards
aarti
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AS-22
Replies (2)
Well I think Aarti AS-22 should not affect IND/HUF is tax is paid out of their capital or say personal account.
Ajay
Ajay
hi aarti
As per para 1-3 AS-22 applicable for (1) computing tax on income and (2) disclosure of this amount in financial statement.
In case of individual, provision for tax payble is not made at the end of the year.
As and when tax is paid, the same is debited to capital a/c treating as drawings and no expense is charged to P & L a/c.
Therefore these is no disclosure of taxes on income is required in case of ind.
therefore As-22 will not affect ind case.
HUF is a separate entity, and will be treated as other entity.
current tax and deferred tax will be computed in the same manner and total tax expenses will be considered for accounting purpose.
tax expenses= current tax + deferred tax
this expenses is not a drawing for HUF.
Vineet
As per para 1-3 AS-22 applicable for (1) computing tax on income and (2) disclosure of this amount in financial statement.
In case of individual, provision for tax payble is not made at the end of the year.
As and when tax is paid, the same is debited to capital a/c treating as drawings and no expense is charged to P & L a/c.
Therefore these is no disclosure of taxes on income is required in case of ind.
therefore As-22 will not affect ind case.
HUF is a separate entity, and will be treated as other entity.
current tax and deferred tax will be computed in the same manner and total tax expenses will be considered for accounting purpose.
tax expenses= current tax + deferred tax
this expenses is not a drawing for HUF.
Vineet
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