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General Query Regarding income tax.

Tax queries 274 views 9 replies
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6 Points Posted on 12 March 2022

why is not income tax paid allowed as an deduction in profit and loss account?

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On 12 March 2022 at 15:15 Report
Replies (9)
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CFO- at NHTF
58280 Points Posted on 12 March 2022
It's liability & it will go balance sheet . Corresponding expenses will be there in P & L
59 Reply
On 12 March 2022 at 20:04
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1236 Points Posted on 20 March 2022
When one prepares P&L a/c one has to follow a set format. In this format sales less expenses leads to profit after profit is arrived at one pays income tax on profits! So how can one deduct income tax as an expense?
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On 20 March 2022 at 21:55
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CFO- at NHTF
58280 Points Posted on 20 March 2022

You may see provision for income tax under current liabilities

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On 20 March 2022 at 21:58
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1236 Points Posted on 20 March 2022
Eshwara! Eshwara! he is talking about p&l a/c and you are replying as balance sheet! Aayeyayee yo ayayeyaa! What did you have for dinner Ramah! Po Po!
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On 20 March 2022 at 22:07
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CFO- at NHTF
58280 Points Posted on 20 March 2022

Samantha ! Actress !!

PBT - Tax = PAT 

Sch III has Income tax in the format in P&L but final effect in accounts will be in Balance Sheet ..

Open your eyes and have dinner and come back 

 

 

 

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On 20 March 2022 at 22:12
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1236 Points Posted on 20 March 2022
Are you trying to teach that in the equation you cited Tax has now qualified as "expense" ???
let me suggest you should read an ILO ready reckoner "How to read a balance sheet ".Your concepts will straighten out in less than an hour!
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On 20 March 2022 at 22:22
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CFO- at NHTF
58280 Points Posted on 20 March 2022
Income Tax is not an expense for calculating Net Profit for tax purposes..

For cash flow purposes and PAT purposes only it will be disclosed as per Sch III
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On 20 March 2022 at 22:53
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1236 Points Posted on 20 March 2022
Only first para relevant! But it has no explanatory note!
Thanks Murugaa!
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On 20 March 2022 at 22:58
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CFO- at NHTF
58280 Points Posted on 21 March 2022
Income Tax is not an expense and that's why it's not allowed as a deduction in profit and loss account..

Hope this works thalaivee !!
59 Reply
On 21 March 2022 at 00:33


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