how will journlise income tax entery ? is it reduce profit or cpaital withdrwal
Sumit Periwal (3 Points)
07 December 2017how will journlise income tax entery ? is it reduce profit or cpaital withdrwal
Vineet Goyal - indiaitr.com
(Founder of IndiaITR.com)
(184 Points)
Replied 07 December 2017
shailesh
(ca student)
(296 Points)
Replied 07 December 2017
shailesh
(ca student)
(296 Points)
Replied 07 December 2017
Sumit Periwal
(3 Points)
Replied 07 December 2017
TAPASYA
(CA)
(297 Points)
Replied 07 December 2017
RAJA P M
("Do the Right Thing...!!!")
(126697 Points)
Replied 07 December 2017
RAJA P M
("Do the Right Thing...!!!")
(126697 Points)
Replied 07 December 2017
Ajit Hegde
(CA - Final)
(1367 Points)
Replied 08 December 2017
RAJA P M
("Do the Right Thing...!!!")
(126697 Points)
Replied 08 December 2017
Originally posted by : Ajit Hegde | ||
There is nothing wrong in charging it to p&l account. Anyways the net profit will be again transfered to capital account. In case of other than proprietorship, we charge it to p&l only. Hence passing through p&l is the correct way. |
Ajit Hegde
(CA - Final)
(1367 Points)
Replied 08 December 2017
Im sorry to say. I suggest you the same. I do not know who will pass tax provision entry through capital account.
RAJA P M
("Do the Right Thing...!!!")
(126697 Points)
Replied 08 December 2017
Originally posted by : Ajit Hegde | ||
Im sorry to say. I suggest you the same. I do not know who will pass tax provision entry through capital account. |
TAPASYA
(CA)
(297 Points)
Replied 08 December 2017
@ RAJA P M SIR SUPPOSE IT IS A PRIVATE LIMITED COMPANY...IN THAT CASE WE DONT HAVE CAPITAL ACCOUNTS AND WE CREATE PROV THROUGH PNL ACCOUNT ITSELF...
IF U SUGGEST PROV CANT BE CREATED THROUGH PNL THEN HOW WILL THE PROVISION BE CREATED..
FOR OTHER THAN CO. U MAY CHOOSE CAPITAL ACCOUNT....BUT THE QUESTION POSTER HAS NOT SPECIFIED THE ORGANISATION TYPE, THUS I SUGGESTED PNL WHICH WILL BE CORRECT IN BOTH TYPES...
mohammad
(article assistant)
(140 Points)
Replied 09 December 2017
AS PER MY OPINION, TRATMENT OF PROVISION FOR INCOME TAX IS DEPEND ON THE STATUS OF CONCERN. I.E WHETHER IT IS PROPRIETORSHIP OR PARTNERSHIP OR IT IS A COMPANY.
IN CASE OF COMPANY PROVISION FOR TAX HAS BEEN MADE AND SAME HAS BEEN ADJUSTED AGAINST ADVANCE TAX OR TDS OR SELF ASSESSMENT TAX.
WHILE IN CASE OF PROPRIETORSHIP AND PARTNERSHIP FIRM, INCOME TAX HAS BEEN ADJUSTED AGAINST CAPITAL ONLY AS PROFIT AS WEL AS LOSS ALSO TRANSFERRED TO CAPITAL ACCOUNT AT THE YEAR END. SO THERE IS NO DIFFERENCE IN DEBITING PROFIT & LOSS OR CAPITAL ACCOUNT WHILE PAYING INCOME TAX IN CASE OF PROPRIETORSHIP AND PARTNERSHIP FIRM CONCERN.
devendrakumar
(Chartered Accountant)
(11 Points)
Replied 09 December 2017
Income Tax is payable if there taxable Profit
Income Tax is an expenditure of the entity.
Ultimately it reduces the profit and in turn it reduces the balance in capital account
ENTRY
Income Tax Account Dr.
Income Tax Payable Account Cr.
( Being provision for Income
Tax Payable for the A.Y. )
Income Tax Account is to be reflected on debit side of I & E A/c or Profit & Loss Account for the period or Year.
Debit in the Profit & Loss Account or I & E A/c will result in reduced profit
Indirectly it will reflect as withdrawal of capital.