corporate income tax accounting help needed

INCOME TAX IS CALCULATED ON THE NET PROFIT OF THE COMPANY AS PER THE INCOME TAX....

FLAT RATE OF 30%..

SURCHARGE IS APPLICABLE IF TURNOVER EXCEEDS Rs.1,00,00,000/-

EDUCATION CESS IS ALSO APPLICABLE @ 3% OF INCOME TAX AND SURCHARGE IF ANY

On quaterly basis net profit of the company to be computed and on that amount, income tax rate of 33.22%(30+7.5%+3%- For A.Y 2012-13) will be computed and advance tax shall be paid.

Entry in SAP

Advance income tax a/c   Dr.

To Bank

After the year end, you have to compute the income tax and pass the entry as below:

Income Tax Account A/c Dr.

Provision for Income tax A/c. Cr.

During the year, you might have paid advance income tax.  At the year end, your books show one asset account (Advance income tax account) and one liability account (provision for income tax account).  Once the income tax assessment got over, you can nullify these two accounts and the balance can be charged off to Profit and loss account.