Income Tax

income tax refund directly to be taken in p&l (appropriation) account in case of co. or capital account in the case of firm or individual and not subject to tax.

Directly on P&L Appropriation A/c

Income Tax refund is not taxable. but interest on Income Tax refund is taxable.

interest received on income tax is taxable under income from other sources

it also depends on the accoounting entry passed for income tax paid , which is being refunded now ............If you Income Tax Refundable A/c is appearing in the Balance Sheet ........the refund will be credited to that account

thanx for getting this query

Hello, I have a question about itemized deductions. I am using form 1040 and I have donated a car last year that I want to write off for $500.00. Line 40 says to use your itemized deductions OR the Standard Deduction. Shouldn't the $500 donation be ADDED to the Standard Deduction, in turn lowering your taxable income by $500?? The way it is now, its only beneficial to itemize deductions if you donate tons of stuff or expensive items that total more than the Standard Deduction. Am I understanding this correctly? Thanks for any help.