Estimation of working capital

Payment due on taxes to the Government is an accrued expense and hence a liability for the company. The company has already paid 90% of the tax in advance in quarterly instalments. The remaining 10% is due to be paid and hence considered as a Current Liability.

Correct me if I am wrong.

Hi NIhar. See, tax is an expense for the company. When expenses are paid as and when they are accrued, they go to the debit side of Profit & Loss Account. In case of delay in payment, it becomes a liability.

Advance tax is not an expense paid in advance. So it is not an asset.