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If provision for income tax is less than current tax???
if provision for income tax in case of companies has become lower than the current tax that is tax. and the balance sheet has been filed....then what will be the accounting entry in next financial year.
Replies (4)
however actual self assessment tax paid is equivalent to the current tax....
no need for any entry , balance in the provision account has to be adjusted with the next years provision ( we can make less provision in next year , as we already have a balance in provision account ) .
but our provision itself is less than actual tax liability.
sorry , I thought provision is higher than actual tax .
* difference between provision and actual tax should be debited to profit and loss account in next year but it should be shown separately .
* this loss should be shown separately as a prior period item .
* difference between provision and actual tax should be debited to profit and loss account in next year but it should be shown separately .
* this loss should be shown separately as a prior period item .
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